On May 26, 2022 — nearly a year after the partial collapse of Champlain Towers South—Florida enacted new legislation to address safety concerns for condominiums and cooperative buildings with the passage of Senate Bill 4-D. Applicable associations will now have a slew of additional obligations that include: performing milestone inspections for all buildings that are three stories or higher; completing periodic structural integrity reserve studies; and disclosing information related to building safety to both the Division of Florida Condominiums, Timeshares, and Mobile Homes ("Division") and prospective purchasers of condominium units. The new legislation also eliminates the option for association members to waive and/or redirect certain reserve funds set aside for building components deemed critical to structural soundness and safety.
Overall, the changes are more stringent than the 40-year recertification procedures in Broward and Miami-Dade Counties. Now all qualifying condominiums and cooperative buildings in Florida within three miles of the coastline must perform a milestone inspection 25 years after initial occupancy and every 10 years after. For those more than three miles from the coastline, the milestone inspection is pushed back to 30 years after initial occupancy and every 10 years after. And regardless of the location, if a milestone inspection is required and the building's certificate of occupancy was issued on or before July 1, 1992, the milestone inspection must be performed by December 31, 2024. This is the same deadline for associations existing on or before July 1, 2022, to complete their first structural integrity reserve study.
The Legislature has also tasked the Division with collecting relative data from condominiums and cooperative buildings that will be published on the Division's website. Associations existing on or before July 1, 2022, will have until January 1, 2023, to provide the Division with: (1) the number of buildings on the condominium/cooperative property that are three stories or higher; (2) the total number of units in all such buildings; (3) the addresses of all such buildings; and (4) the counties in which all such buildings are located. The foregoing information will be compiled and searchable on the Division's website, and associations will be required to notify the Division of any changes to such information.
There is no question that these various reforms are intended to prevent another tragedy. But the Legislature may have overlooked or rejected the unintended consequences of this legislation which we believe may have been the reason the Legislature failed to pass any legislation during the regular session. Any additional obligations imposed upon an association and the inability to waive reserves will likely cause universal assessment increases for all condominiums and cooperative buildings throughout Florida. Such increase in assessments will likely be particularly difficult on seniors with fixed incomes or other owners struggling to meet monthly payments. Additionally, there may be scenarios where there is little to no return in value for significant capital investment on structural soundness and safety. In other words, the economic side effect of this legislation may steer aging condominiums and cooperative buildings into the hands of redevelopers—rather than preserving these buildings for existing and/or prospective residents.
The financial concerns here are also analogous to those created by Section 718.112(2)(l) of the Florida Condominium Act, which requires all high-rise condominiums to retrofit their buildings with a fire sprinkler system or an engineered life safety system. A prior version of this statute included a compliance deadline and an option to opt-out, but confusion regarding the opt-out led to a 2019 amendment clarifying that all high-rise condominiums had to pick one system or the other by January 1, 2024.
Similar to the fire sprinkler burdens foisted above, the new legislation on building safety, while laudable in theory, may be too little too late for the thousands of condominiums and cooperative buildings past the fiscal point of no return resulting in less affordable housing as condominiums elect to sell out to redevelopers. And given that investigators are still determining whether Champlain Towers South collapsed because of maintenance issues, a design defect, or a combination of both, only time will tell if the new legislation is an appropriate safety measure for Florida residents or a legislative overreaction to a unique event.
1. The original deadline in Section 718.112(2)(l) was the end of 2014, but it has been extended twice since the statute was enacted in 2004.
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