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Articles Tagged with Florida condominium safety reforms

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.  Florida-legislature2-300x169The 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.

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Gary-Mars-2021-2-200x300The 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.

Miami-Herald-3-27-22-print-page-342x1024Even 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.

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Gary-Mars-2021-2-200x300When 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.

Miami-Herald-1-23-22-1006x1024Fannie’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.

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