Statewide Condo Legislation Increases Costs and Safety

New statewide condo legislation that recently passed unanimously in the Florida house is going to significantly affect condominium fees for residents. It will also affect the governing process of condo associations regarding inspections and necessary renovations. The legislation will require condos to set aside money in reserves to cover repairs deemed necessary by official inspections. This future law is in response to the Surfside tower collapse in Miami, 2021.

A change for the better

Margaret Rolando is a Miami-based lawyer who specializes in real estate and condominium law. She is a partner at Shutts & Bowen LLP and has extensive experience in the creation and operation of condominiums. She explains that Miami-Dade County was one of the few counties in Florida that required 40-year certification inspection of condos before this new legislation. However, it still wasn’t enough to prevent the Surfside tragedy. She sees this new statewide legislation as a positive step.

“I think it’s gonna be much better for condos and associations. They’re going to have more resources and guardrails. It’s going to give the boards cover to do the right thing.”

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It will also mean less flexibility for condo boards regarding what needs to be fixed and repaired. Cosmetic repairs will always come second to more serious structural repairs. The legislation increases the liability for condo board members and opens them to the possibility of being sued if they don’t comply with Statues.

Rolando plainly state — “It’s going to increase the cost of ownership except for those building and units where they have already been funding properly.”

Two phases of inspections

A major part of the legislation mandates structural inspections for all condos that are 30 years or older and three stories or higher. However, if the building is within 3 miles of the coast, as many are in the Tampa Bay area, that number drops to 25 years or older. The inspections must be conducted by an architect or engineer. There are two phases to the inspection process:

Although condo associations have until December 31, 2024, to submit the inspections, it’s important they start soon. Margaret Rolando says the recent construction boom in Florida will make the inspection process much more difficult. “Associations have two years to get their act together and ramp up.”

The inspections will look for problems in the following areas:

Ensuing reserves are ready

When inspections turn up things that need to be fixed, then the reserve comes in. A condo association or developer building a condo must have a certain amount of money in reserve to pay for these fixes. However, many developers and condo associations do not properly fund their reserve. Instead, they wave off problems to be fixed down the line when there is potentially more money.

This legislation changes that.

“There’s going to be the sticker shock for unit owners. Especially ones in working class condos where they have been waiving reserves for years,” Rolando admits. She also says this increase reflects the true costs of owning a condo.

Currently, associations are only required to reserve money for roof, paving, and painting. Under this Statue, many condo associations would reserve for a new roof and then focus on other, more cosmetic, aspects. For example, upgrading the elevator, redoing the lobby, repaving the pool. Nothing that focused on actual structure.

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And while the initial cost of funding these reserves may be a shock to condo residents in the next few years, eventually it will stabilize. In the end, both developers and individual unit owners will disclose inspections to potential buyers. This means that all condo residents and potential condo residents will know the state of their home. At the end of the day, condos are a collective living space and everyone deserves to be aware of where they live. Margaret Rolando says it plainly:

“If you don’t fix the roof or if you have an overburdened electrical system in your home, the only person it’s hurting is you. But in a condo, it hurts everybody and you’re jeopardizing the value and the safety of everybody in the building.”

The Surfside tragedy

In June 2021, a 12-story beachside condo called Champlain Towers South in Surfside, Miami, partially collapsed. Ninety-eight people died. Officials determined that the collapse was because of the deterioration of reinforced concrete structural support due to water penetration and corrosion. The problems were reported in 2018 and again in early 2021, but no action was taken to fix the building.

After the collapse and subsequent rescue, a lawsuit was filed by a resident of the building against the Champlain Towers South Condominium Association. They sought $5 million in damages “due to defendant’s acts and omissions and their failure to properly protect the lives and property of plaintiff and class members.”

On May 12, 2022, a tentative settlement for $997 million was made between families of the condominium complex and various entities responsible for the development and maintenance of the property.

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