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Senate panel calls for more clarity, time on Surfside-inspired condo inspection law

Florida Politics – by Jesse Scheckner – Feb 8, 2023

Industry experts agree the law in its current form has many financial and compliance problems.

Members of the Senate Committee on Regulated Industries are fielding recommendations from a panel of experts on how to improve new Surfside-inspired regulations for condominium inspections and maintenance set to go into effect next year.

The gist: The law needs to be clearer, simpler and more inclusive, and condo owners need more time to comply.

Florida lawmakers passed SB 4D this past June, a year after a wing of the 12-story Champlain Towers South condo in Surfside collapsed, fatally burying 98 people in one of the deadliest building failures in modern history.

The measure set forth numerous steps condo associations and management companies must take in the near future to prevent a similar tragedy in the future. Beginning Dec. 31, 2024, condo towers at least three stories tall and within three miles of a coastline must be inspected when the building reaches 25 years of age. Those more than three miles inland would have to be inspected at 30 years. After that initial “milestone” inspection, the buildings must be inspected at least once per decade.

The law also includes transparency measures allowing buyers, renters and unit owners to access inspection records and preventing condo associations from waiving maintenance reserve funds.

Both the inspection requirements and the reserve fund provision came under scrutiny by more than half a dozen industry specialists, all of whom agreed the law in its current form contains many financial and compliance problems.

Will Simons, President of the Association Reserves, which has conducted more than 70,000 structural and fiscal reviews of properties across the country called “reserve studies” — including Champlain Towers South — said the law features confusing language that at best muddies interpretation.

At worst, he said, it excludes many who are capable of conducting the tens of thousands of reserve studies that will be needed once the law goes into effect Dec. 31, 2024, from being able to do so.

That deadline also needs to be extended, he added.

“To have all these done by the end of 2024, regardless of how many providers are operating in the state, is a very tall order,” he said. “We will do our best, but I think the Legislature can help us with that.”

Providing a later deadline will also provide condo associations with more fiscal runway to comply with reserve fund rules, said Debbie Reinhardt, President of the CEOMC, which represents some 20,000 licensed association managers in Florida.

For decades, condo associations in Florida had no legal requirement to set aside money for repairs and upkeep. Many didn’t. In 2020, roughly a year before the building caved in, Associated Reserves warned Champlain Towers South it had just 7% of the recommended money it needed to complete repair and replacement projects.

That’s the case for a vast number of properties, according to Reinhardt. She said many condo owners just don’t have the money to fill the long-underfilled funding pool in so short a time frame, particularly with skyrocketing insurance premiums, rising utility costs and other pricey, state-mandated upgrades.

Reinhardt suggested lawmakers extend the time frame to five years.

“Every meeting that I go to — and I’ve done a lot of budget meetings this past year — I walk out the door and they say, ‘I have to put my unit on the market. I can’t afford to live here anymore,’” she said. “There are buildings that have waived reserves for 40 years. How can they get caught up in two years?”

Lobbyist Travis Moore, speaking for the Community Association Institute, called SB 4D a “weird kind of Frankenstein” measure composed of proposals both chambers of the Legislature received and hastily stitched together last year. As a result, he said, the measure contains oversights that need shoring up.

Under the measure’s current language, he said, the 25- and 30-year milestone inspections could be interpreted as including nonresidential buildings like marinas. He added that the vague way in which the three-story height requirement is written may be similarly confounding.

“We have a lot of these mixed-use kind of buildings, where we’ve got some (parts of the development) that are villas, some that are high-rises, some that are just one story (and so on), so we need to make it clear,” he said.

How the law defines what is and isn’t a coastal area may also lead to some confusion.

“Coastal, the way it’s written now — Tampa Bay is actually excluded,” he said. “It’s not within three miles of the Gulf Coast, way over to the west, but it’s certainly sitting right on the water, and Tampa Bay is a major body of water that is saltwater… We’ve got to fix that.”

Published On: February 8th, 2023

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