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BY Matt Firestone|June 23, 2022

Condominium Associations-New Legislation Imposing Requirements for Maintaining Structural Integrity of Buildings

Governor Ron DeSantis has signed into law certain changes to the Florida Statutes which will require certain condominium associations and cooperative associations to meet certain safety inspections on a periodic basis and to maintain sufficient funds, in reserve accounts, for maintenance items.  This article will examine these changes, as they impact condominium associations.   The article is divided into the following six sections:   

  1. MANDATORY STRUCTURAL INSPECTIONS
  2. STRUCTURAL INTEGRITY RESERVE STUDIES
  3. PENALTIES
  4. NON-WAIVER OF RESERVES
  5. REPORTING TO THE DIVISION
  6. DISCLOSURES

 

  1. MANDATORY STRUCTURAL INSPECTIONS

A new Section 553.899, Florida Statutes was created.  It requires certain condominium (and cooperative) buildings to undergo a “milestone inspection”, as defined in Section 553.899(2)(a), Florida Statutes.  The requirement applies to buildings that are three stories or more in height. The purpose of that inspection is “determining the general structural condition of the building as it affects the safety of such building, including a determination of any necessary maintenance, repair, or replacement of any structural component of the building.”

A. PHASES OF THE INSPECTION

Pursuant to Section 553.899(7), Florida Statutes, the “milestone inspection” consists of two phases:

B. DATE FOR COMPLETION OF INSPECTION

Section 553.899(3), Florida Statutes, provides for the following deadline to “have a milestone inspection performed for each building that is three stories or more in height”.

C. CREATION OF AND DISPOSITION OF THE INSPECTION REPORT

Section 553.899(8), Florida Statutes, provides:

(8) Upon completion of a phase one or phase two milestone inspection, the architect or engineer who performed the inspection must submit a sealed copy of the inspection report with a separate summary of, at minimum, the material findings and recommendations in the inspection report to the condominium association or cooperative association, and to the building official of the local government which has jurisdiction. The inspection report must, at a minimum, meet all of the following criteria:

(a) Bear the seal and signature, or the electronic signature, of the licensed engineer or architect who performed the inspection.

(b) Indicate the manner and type of inspection forming the basis for the inspection report.

(c) Identify any substantial structural deterioration, within a reasonable professional probability based on the scope of the inspection, describe the extent of such deterioration, and identify any recommended repairs for such deterioration.

(d) State whether unsafe or dangerous conditions, as those terms are defined in the Florida Building Code, were observed.

(e) Recommend any remedial or preventive repair for any items that are damaged but are not substantial structural deterioration.

(f) Identify and describe any items requiring further inspection.

Section 553.899(9), Florida Statutes, provides:

(9) The association must distribute a copy of the inspector-prepared summary of the inspection report to each condominium unit owner or cooperative unit owner, regardless of the findings or recommendations in the report, by United States mail or personal delivery and by electronic transmission to unit owners who previously consented to received notice by electronic transmission; must post a copy of the inspector-prepared summary in a conspicuous place on the condominium or cooperative property; and must publish the full report and inspector prepared summary on the association's website, if the association is required 301 to have a website.

  1. STRUCTURAL INTEGRITY RESERVE STUDIES

A new definition was added to Section 718.03, Florida Statutes.  That definition, added as subpart (25), reads:

(25) "Structural integrity reserve study" means a study of the reserve funds required for future major repairs and replacement of the common areas based on a visual inspection of the common areas. A structural integrity reserve study may be performed by any person qualified to perform such study. However, the visual inspection portion of the structural integrity reserve study must be performed by an engineer licensed under chapter 471 or an architect licensed under chapter 481. At a minimum, a structural integrity reserve study must identify the common areas being visually inspected, state the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of the common areas being visually inspected, and provide a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each common area being visually inspected by the end of the estimated remaining useful life of each common area.            \

Section 718.112(2)(f)2.a, Florida Statutes, which describes the items to be included in a condominium association’s annual budget, was revised to include references to a “structural integrity reserve study”:

The amount to be reserved for an item is determined by the association's most recent structural integrity reserve study that must be completed by December 31, 2024. If the amount to be reserved for an item is not in the association's initial or most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, the amount must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of the reserve item.

 Pursuant to 718.112(2)(g), Florida Statutes:

An association must have a structural integrity reserve study completed at least every 10 years after the condominium's creation for each building on the condominium property that is three stories or higher in height which includes, at a minimum, a study of the following items as related to the structural integrity and safety of the building:

  1. Roof.
  2. Load-bearing walls or other primary structural members.
  3. Floor.
  4. Foundation.
  5. Fireproofing and fire protection systems.
  6. Plumbing.
  7. Electrical systems.
  8. Waterproofing and exterior painting.
  9. Windows.
  10. Any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000 and the failure to replace or maintain such item negatively affects the items listed in subparagraphs a.-i., as determined by the licensed engineer or architect performing the visual inspection portion of the structural integrity reserve study.
  1. PENALTIES

Section 718.112(2)(g), Florida Statutes, provides:

  1. Associations existing on or before July 1, 2022, which are controlled by unit owners other than the developer, must have a structural integrity reserve study completed by December 31, 2024, for each building on the condominium property that is three stories or higher in height.
  2. If an association fails to complete a structural integrity reserve study pursuant to this paragraph, such failure is a breach of an officer's and director's fiduciary relationship to the unit owners under s. 718.111(1). h) Mandatory milestone inspections.—If an association is required to have a milestone inspection performed pursuant to s.553.899, the association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with the requirements of s. 553.899. The association is responsible for all costs associated with the inspection. If the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed pursuant to s. 553.899, such failure is a breach of the officers' and directors' fiduciary relationship to the unit owners under s. 718.111(1)(a). Upon completion of a phase one or phase two milestone inspection and receipt of the inspector-prepared summary of the inspection report from the architect or engineer who performed the inspection, the association must distribute a copy of the inspector-prepared summary of the inspection report to each unit owner, regardless of the findings or recommendations in the report, by United States mail or personal delivery and by electronic transmission to unit owners who previously consented to receive notice by electronic transmission; must post a copy of the inspector-prepared summary in a conspicuous place on the condominium property; and must publish the full report and inspector-prepared summary on the association's website, if the association is required to have a website.

Section 718.501, Florida Statutes, which deals with the enforcement powers and authority of the Division of Florida Condominiums, Timeshares, and Mobile Homes (the “Division”), was amended to provide the Division with jurisdiction over “complaints related to the procedural completion of milestone inspections under s. 553.899.” and “the procedural completion of 1207 structural integrity reserve studies under s. 718.112(2)(g).”

  1. NON-WAIVER OF RESERVES

 Section 718.12(2)(f), Florida Statutes, entitled “Annual budget”, will require a condominium association that needs a “structural integrity reserve study” to make sure of the following:

The amount to be reserved for an item is determined by the association’s most recent structural integrity reserve study that must be completed by December 31, 2024. If the amount to be reserved for an item is not in the association’s initial or most recent structural integrity reserve study or the association has not completed a structural integrity reserve study, the amount must be computed using a formula based upon estimated remaining useful life and estimated replacement cost or deferred maintenance expense of the reserve item                                                                                      

  That subsection further provides:                                                                                                 

Effective December 31, 2024, members of a unit-owner-controlled association may not determine to provide no reserves or less reserves than required by this subsection for items listed in paragraph (g).

 This represents a substantial change from existing language in Section 718.12(f), which allows unit owners to vote to provide “no reserves or less reserves than required by this subsection”.  Effective December 31, 2024, unit owners cannot reduce reserves where the reserves are needed pursuant to the determination made in the association’s “most recent structural integrity reserve study”. 

  1. REPORTING TO THE DIVISION

Section 718.501, Florida Statutes, was further amended by adding a requirement that condominium associations report certain information to the Division.  Subpart (3) was added to that section which provides:

(3)(a) On or before January 1, 2023, condominium associations existing on or before July 1, 2022, must provide the following information to the division in writing, by e-mail, United States Postal Service, commercial delivery service, or hand delivery, at a physical address or e-mail 1476 address provided by the division and on a form posted on the division's website:

  1. The number of buildings on the condominium property that are three stories or higher in height.
  2. The total number of units in all such buildings.
  3. The addresses of all such buildings.
  4. The counties in which all such buildings are located.

(b) The division must compile a list of the number of buildings on condominium property that are three stories or higher in height, which is searchable by county, and must post the list on the division's website. This list must include all of the following information:

  1. The name of each association with buildings on the condominium property that are three stories or higher in height.
  2. The number of such buildings on each association's property.
  3. The addresses of all such buildings.
  4. The counties in which all such buildings are located.
  1. DISCLOSURES

Certain information relating to the mandatory structural inspections and the structural integrity reserve studies must be disclosed in connection with the sale of a condominium unit.

A. DEVELOPER DISCLOSURES

Section 718.503, Florida Statutes, which deals with disclosures for condominium units, was amended to include additional documents that the developer needs to furnish to a prospective buyer or lessee:

  1. A copy of the inspector-prepared summary of the 1607 milestone inspection report as described in ss. 553.899 and 1608 718.301(4)(p).
  2. A copy of the association’s most recent structural 1610 integrity reserve study or a statement that the association has 1611 not completed a structural integrity reserve study.

B. NONDEVELOPER DISCLOSURES

Section 718.503, Florida Statutes, was also amended to include additional documents that must be provided by non-developer unit owners to potential buyers:

  1. A copy of the inspector-prepared summary of the milestone inspection report as described in ss. 553.899 and 718.301(4)(p), if applicable.
  1. The association’s most recent structural integrity 1627 reserve study or a statement that the association has not 1628 completed a structural integrity reserve study.

 For guidance as to how these statutory changes impact your condominium, please contact our association law team.

Matt G. Firestone