New Legislation

April 14, 2022

The Path Forward for Florida Condo-Safety Reforms

by Roberto C. Blanch

Roberto C. Blanch

Florida’s legislature has received very poor marks for its failure to pass any condominium-safety reforms after the horrific Champlain Towers tragedy. Many condominium residents and community association attorneys expected the state’s lawmakers would strike a deal on a bill to revamp Florida’s existing condo regulations by requiring periodic inspections of buildings.

Pundits and newspaper columnists are lamenting the fact that the two chambers ultimately could not agree on whether to require condominium associations to maintain financial reserves for major structural maintenance and repairs. Given the horrific tragedy that claimed 98 lives, not-to-mention the significant number of aging buildings across the state with potential structural deficiencies, it is no surprise that there has been an outcry after the legislature failed to act.

Taking into consideration that this year’s legislative session began just over six months after the collapse, the legislature’s inability to establish mandatory safety reforms and require specific funding conditions for condominiums throughout the state was actually not very surprising. The issues of high-rise structural inspections, condominium association financial reserves, and mandatory fire sprinklers have flummoxed lawmakers in Florida and other states for decades.

Florida’s legislators should now take the time to work through the difficult details of condominium high-rise safety reforms during the remainder of the year and the pre-session legislative meetings for the 2023 session. There may not be a one-size-fits-all solution for condominium buildings of varying heights and stages in their lifespan.

March 27, 2022

Firm’s Miami Herald Real Estate Column: “What’s Next for Condo-Safety Reforms After Legislature Fails to Act?”

by Siegfried Rivera

Siegfried Rivera

The firm’s latest Miami Herald “Real Estate Counselor” column authored by Gary M. Mars appears in today’s Neighbors section and is titled “What’s Next for Condo-Safety Reforms After Legislature Fails to Act?”. The article focuses on the very poor marks that the state legislature has received in newspaper editorials from the Herald and across the state for its failure to pass any condominium-safety reforms after the horrific Champlain Towers tragedy. It notes the editorials lament that the two chambers ultimately could not reach bicameral agreement on whether to require condominium associations to maintain financial reserves for major structural maintenance and repairs, and they are certainly correct to bemoan the legislative shortfall. Gary’s article continues:

. . . However, from the point of view of someone who has kept a finger on the pulse of the state’s condominium laws for the past 30 years, the failure of the legislators to pass reforms during the session that began just over six months after the collapse was not surprising. Lawmakers in Florida as well as other states have been grappling with the issues of high-rise structural inspections and condominium association financial reserves for decades, not-to-mention fire sprinkler and suppression systems that can be very difficult and expensive to retrofit into older buildings.

It was perhaps overly auspicious of lawmakers to propose sweeping reforms without having first ironed out many of the important aspects of the proposals in the pre-session legislative meetings. They put forth many of the recommendations from task forces from engineering/construction trade groups and The Florida Bar, but they ultimately could not agree on the details of inspection dates and reserve funding levels.

Even with no changes to the state’s laws, significant condo-safety reforms are being implemented by lenders after major changes in underwriting requirements from government-sponsored Fannie Mae and Freddie Mac. In fact, many associations have already been struggling to comply with the new requirement from these quasi government agencies for lenders to have the condominium associations for mortgage applicants complete an eight-page form. For towers in their teen years that have never conducted any kind of major engineering inspections, association directors are completely unequipped to attest to their buildings’ current structural integrity in these questionnaires, and the potential legal liabilities would preclude them from making such representations.

March 21, 2022

Gary Mars Quoted in Front-Page Article in Today’s Sun Sentinel: “Failed Condo Safety Bill Leaves Residents, Buyers in Limbo”

by Siegfried Rivera

Siegfried Rivera

An article featuring insights from firm shareholder Gary M. Mars appears on the front page of today’s Sun Sentinel. The article, which is headlined “Failed Condo Safety Bill Leaves Residents, Buyers in Limbo,” focuses on what is in store for condominium safety reforms from lenders and insurers after the measures before the Florida Legislature failed to pass during the 2022 session that ended last week. The article reads:

. . . Some condo lawyers argue that it was too ambitious to expect that a sweeping safety bill could be passed in a short three-month legislative session.

“I know it was very, very ambitious legislation,” said Gary Mars, a condo lawyer at Siegfried Rivera in Coral Gables. “It would have taken a lot of effort to get it through all of the machinations developing legislation of this type.”

He noted that not every building is in dire structural straits, or even old enough to be required to follow inspection rules such as the ones in Broward and Miami-Dade counties, which mandate deep-dive studies after 40 years.

“I represent a lot of associations in buildings in their teenaged years,” he said.

“They’re getting sophisticated reports” from their engineers about deferred maintenance issues such as waterproofing, balcony restorations and painting, Mars said. But the reports don’t cover structural issues.

“They may have wonderful reports, but those reports don’t give the association the ability to check the box” about the building’s overall condition, he said. “There’s not a perfect solution to this problem.”. . .

March 9, 2022

2022 Legislative Session is Almost Over

by Nicole R. Kurtz

Nicole R. Kurtz

The Florida Legislative Session began on January 11th and is expected to wrap up by the end of this week. We’ve been tracking the 21 bills filed throughout the session that would directly impact community associations throughout Florida. Below is a summary of the proposed bills that are still making their way through the final leg of this year’s session.

As always, we will inform our readers as to which of the proposed bills become new law, and we will also provide a comprehensive summary of those bills and their impact on community associations. In addition, given the anticipated changes that might come into effect for the state regarding the funding of reserves and new inspection requirements for condominium buildings, we encourage readers to also stay on the lookout for possible changes at local levels. For example, we recently covered a new Miami-Dade ordinance that requires community associations located in the county to upload certain documents and information to a new publicly accessible database (click here to learn more).

Residential Associations — SB 394 and related HB 547 revise the certification and educational requirements for boards of directors of residential community associations. Newly elected or appointed board members would be required to certify by affidavit that they have read their association’s declaration, articles of incorporation, bylaws and written policies AND will attend a division-approved board certification course. If passed, this law would be effective July 1, 2022.

Condominium & Homeowners Associations Flags — CS/SB 438 and related HB 465 permit owners in condominium associations and mandatory homeowners associations to display a flag representing the United States Space Force on designated holidays. If passed, this law would come into effect on July 1, 2022.

Display of Flags in Residential Associations — SB 1716 and related HB 1371 authorize owners of condominium associations to display The United States flag, the official flag of the State of Florida, a flag that represents specific special forces, a POW-MIA flag and certain first responder flags, even if the association’s covenants, restrictions, rules or requirements prohibit owners from displaying flags. This act will take effect July 1, 2022, if passed.

March 7, 2022

New Miami-Dade Law Requires Public Filings of Financial, Structural Reports

by Nicole R. Kurtz

Nicole R. Kurtz

The demands for increased access to condominium financial records and structural reports in Florida after the horrific Champlain Towers tragedy are leading to possible changes at the state and local levels, and they just led to a new local ordinance in Miami-Dade County.

On March 1st, the Miami-Dade Board of County Commissioners unanimously approved an ordinance establishing a searchable database for financial statements and structural reports, among other information and documentation, for residential community associations located in Miami-Dade County. The new ordinance requires community associations in Miami-Dade County, including all condominium, cooperative, and homeowners’ associations, to upload certain documents and information to the county’s database, along with a written registration with the Miami-Dade County Department of Regulatory and Economic Resources, by Feb. 1st of each year, beginning on February 1, 2023.

The ordinance provides that the documents uploaded to the database will be publicly accessible on the county’s website, and will also be searchable. Some of the documents to be attached to the annual registration submitted to the county include the following: the name of the community association; the name and contact information for the association’s property manager or other designated agent; a list of all officers and directors of the association, including their contact information; a link to the association’s website, if any; a legible copy of the association’s governing documents; a list containing the association’s planned capital projects from the date of registration through February 1st of the following year; a copy of the association’s current budget and financial statements, including any applicable current or approved special assessments; and all reports issued within the last 10 years on the structural status of the property governed by the association, including recertification reports, if applicable.

March 4, 2022

Condo-Safety Reform Bills Making Their Way Through Florida Legislature

by Laura Manning-Hudson

Laura Manning-Hudson

The new condominium safety financing requirements from Fannie Mae and Freddie Mac have drawn a great deal of attention, but the Florida Legislature appears to be poised to go one step further in its response to the horrific Champlain Towers tragedy.

The Florida House and Senate are both moving forward with bills that would add new inspection requirements on condominium buildings. A bill that is now ready to go before the full Senate, SB 1702 would require condominiums that are three stories or taller and located within three miles of the coast to undergo initial inspections 20 years after completion and every seven years thereafter. Buildings in other areas would be required to be inspected after 30 years and every 10 years thereafter.

Flalegislature-300x169 The Florida House has taken up its own version of the bill (HB 7069). Its proposal would require initial inspections to occur 25 years after completion, and buildings further inland would have their first inspection at 30 years. Additional inspections would be required every 10 years.

The House and Senate bills also include differences over reserve studies, which are used to determine the level of funds a condominium community needs to maintain in reserve for future renovations and repairs. The differences between the two bills are likely to soon be consolidated into a final bill for bicameral consideration.

February 18, 2022

Access to Community Association Documents in Legislative Spotlight in Florida

by Laura Manning-Hudson

Laura Manning-Hudson

The market for homes and condominiums throughout the South Florida region is now thriving, and many of the area’s community associations are seeing more document requests from prospective buyers than ever before. Florida law mandates associations provide certain documents to prospective buyers, and several bills are now being considered by the state’s lawmakers to increase access to association financial and engineering records.

Florida law dictates that associations must provide prospective buyers with the community’s declaration, articles of incorporation, bylaws and any related amendments, as well as the rules of the association. They must also provide them with a Q&A/fact sheet covering voting rights, use and leasing restrictions, fees and assessments, and outstanding litigation with liabilities in excess of $100,000.

Flalegislature-300x169 These documents may be provided in hardcopy or digital forms, but digital records are preferred and can be prepared for easy access via a shareable weblink. The records must also be made available for scanning, copying or photographing, so hardcopies should also be available for use as needed. Only the “actual cost” involved in preparing and providing the documents may be passed on to prospective buyers, so there should not be any costs for cases in which only digital access is requested and provided.

January 23, 2022

Firm’s New “Real Estate Counselor” Column in Miami Herald: All Eyes on Florida Legislature for High-Rise Condo Safety Reforms

by Siegfried Rivera

Siegfried Rivera

When the editors of the Miami Herald decided they would like to feature a new column to provide timely legal knowledge on real estate topics for the readers of its Neighbors community news section that appears on Sundays, they turned to the attorneys of Siegfried Rivera as the exclusive contributors for the newspaper’s new Real Estate Counselor. The inaugural edition of the new monthly column authored by the firm’s Gary M. Mars appears in today’s edition and as is titled “All Eyes on Florida Legislature for High-Rise Condo Safety Reforms.” It focuses on the status of reforms after the horrific tragedy of the Champlain Towers South collapse. Gary’s article reads:

. . . So far, the most significant changes have come at the federal level from Fannie Mae and Freddie Mac, two government-sponsored companies that acquire residential loans to offer mortgage-backed securities for investors in the secondary market. They both have a massive influence over the terms for mortgages offered by lenders, and they recently released new requirements for loans for residences in high-rise buildings with five or more attached units to meet their standards for acquisition. The changes, which are now being adopted and implemented by major residential lenders, place a heavy focus on structural and financial stability, and they reinforce the importance of meticulous documentation of all appraisals, meeting minutes, financial statements, engineering reports, inspection reports and reserve studies.

Fannie’s new requirements are already in effect, while Freddie’s will take effect for all mortgages with settlement dates on or after Feb. 28. Its new standards will exclude from eligibility any condo loans for units in communities with what it considers to be critical repair needs, which are defined as those that significantly impact a community’s safety, soundness, structural integrity or habitability, and/or that impact unit values, financial viability or marketability. These include all life-safety hazards, violations of any laws or ordinances, building code violations, fire-safety deficiencies and others.

Subsequently, properties that have already identified elements requiring attention and begun their remediation efforts may become ineligible until such work is completed.

November 3, 2021

Florida Condo Associations Can Now Choose Pre-Suit Mediations for Certain Disputes, But Should They?

by Laura Manning-Hudson

Laura Manning-Hudson

Florida’s condominium laws were amended earlier this year to require that new association bylaws provide for alternative dispute resolution including mediation and arbitration, for many types of disputes. Prior to these latest changes to the state’s laws, condominium associations and unit owners were required to arbitrate these same types of cases with the Division of Florida Condominiums, Timeshares, and Mobile Homes prior to going to court.

Arbitrations under the state agency were a prerequisite to filing suit for condo association/owner disputes that involved or required owners to take any action, or not take any action involving their unit, or to alter or add to a common area. Arbitration was also required for actions involving elections, meeting notices and meeting conduct, requests to inspect records, and condominium terminations.

florida_dbpr-300x170 Instead, the changes now allow condominium associations or unit owners to choose between the state agency’s hearing process or the pre-suit mediation process as required under the state’s HOA laws. All disputes involving elections and recalls must still go to the Division first.

What is the best choice for condominium associations: the arbitration process with the state agency that has been hearing such disputes for many years, or the pre-suit mediation process?

August 27, 2021

Article by Eduardo Valdes in Today’s Sun Sentinel: “Post-Surfside, condo associations must be proactive with change | Opinion”

by Siegfried Rivera

Siegfried Rivera

An article authored by firm partner Eduardo J. Valdes is featured in the op-ed “Opinions” page of today’s South Florida Sun Sentinel. The article, which is titled “Post-Surfside, condo associations must be proactive with change | Opinion,” focuses on the impact that the horrific tragedy of the Champlain Towers South collapse has had on the condominium associations for similar towers nationwide and their boards of directors. Eduardo notes that in addition to the shared grief and remorse with the families and friends of all the victims, many condo owners across the country are now raising questions about their own buildings’ structural safety and financial health, and some have also begun to feel more concerned about the funding of reserve accounts for major repairs and replacement projects. His article reads:

. . . All buildings deteriorate over time, so associations should always set aside funding on an ongoing basis to mitigate and remediate any structural elements that require attention.

As they begin reassessing their associations’ commitments, condominium boards of directors will generally try to avoid special assessments demanding additional funds from all the unit owners. They will need to consult with legal, financial, engineering and insurance professionals to strike a balance between the funding of reserves and the use of special assessments when they become necessary from a life-safety standpoint.

Condominium association directors and unit-owner members would also be well advised to come to terms with the new reality that future buyers will now have many more questions and concerns than in the past about the financial health of the association and current state of the actual property from the ground up. Some will surely request that sellers provide them with the minutes from prior board meetings, information on any past or planned special assessments, the status of renovation and remediation projects, past changes to the monthly assessments over the years, the findings of past reserve studies, and the status of current reserve funding. They are also now more likely to conduct a thorough visual inspection of the entire property prior to making a written offer.