What S. Fla. Condo Boards Need to Know About the Amendments to the Florida Condominium Statute

On June 9, the governor signed Florida Senate Bill No. 154, (the 2023 Bill), a “cleanup” measure which addressed unanticipated problems arising from the 2022 amendments to the Florida Condominium Act and several other sections of the Laws of Florida which were enacted in response to the 2021 Champlain Towers disaster in which the condominium’s structure collapsed and 98 people died (the 2022 Amendments). In the year since the 2022 Amendments were enacted, the practical problems which arose came into sharp focus. The residents of older buildings, many of whom were themselves elderly, suddenly found themselves facing the prospect of moving out of buildings in which they had lived for decades. This, combined with a severe shortage of affordable rental housing, resulted in these “structural refugees” having no place to go.

The two most urgent problems resulting from the 2022 Amendments were: the number of architects and engineers available to perform the new milestone inspections and structural integrity reserve studies was woefully inadequate to perform inspections on the number of condominium buildings now required to obtain those Inspections and Studies by the deadlines imposed; and the cost of performing required repairs and funding required reserves was beyond the ability of many lower valued condominium associations to afford. Many associations had for years voted to forego reserves to maintain artificially low maintenance fees. The prospect of closing hundreds of Florida condominium buildings due to noncompliance with the statute resulted in the Legislature’s passage of the 2023 Bill. The 2023 Bill makes many technical and stylistic changes, but four important issues were addressed:

• Increase in the Number of People Who Can Perform and Certify Milestone Inspections and Structural Integrity Reserve Studies. Florida Statutes Section 553.899(2)(a) has been amended to expand the type of professionals and others who can perform and certify milestone inspections. The qualifications now include “a team of professionals with an architect or engineer acting as the registered design professional in responsible charge of all work and reports signed and sealed by the appropriate qualified team member”. Neither Florida Statutes Chapter 481, which regulates architects, nor Florida Statutes Chapter 471, which regulates engineers, provides definitions of “professionals” or “teams,” but presumably such teams would work under the direct supervision of the architect or engineer in the performance of the milestone inspections.
• Limited Ability to Waive Reserves. The 2023 Bill provides that if an association has obtained the Division of Condominiums’ approval of an “alternative funding method,” the unit owners may vote to fund no reserves or lower reserves. This leaves it to the Division of Condominiums to devise such alternate funding methods, although it does not even suggest what such methods should be. Conceivably, such alternate funding methods could include a program of banks approved to extend funding for such reserves and repairs, a state-sponsored guaranty program for this type of loan, a state sponsored lender similar in function to Citizens Insurance Corp, or even changes to the Condominium Act which would allow an association to grant a “PACE” type of mortgage on all condominium units.
• Addition of Disputes Subject to Presuit Mediation. The 2023 Bill adds to the definition of “disputes” contained in Florida Statutes Section 718.1255, issues involving milestone inspections, structural integrity reserve studies, the failure to fund reserves and the failure to perform maintenance or repairs recommended in a milestone inspection or structural integrity reserve study. The bill removes this type of dispute from the usual nonbinding arbitration and requires instead that the dispute be submitted to presuit mediation in accordance with Section 718.1255(5), which incorporates the procedures set forth in Section 720.311. In essence, it creates a private right of enforcement for unit owners which can bypass association governance.
• Discretionary Extension of Deadlines. Section 553.899(3)(a) provides “… If a building reached 30 years of age before July 1, 2022, the building’s initial Milestone Inspection must be performed before Dec. 31, 2024. If a building reaches 30 years of age on or after July 1, 2022, and before Dec. 31, 2024, the building’s initial milestone inspection must be performed before Dec. 31, 2025. Recognizing that there will be many associations chasing after a limited number of architects and engineers, Section 553.899(3)(c) now provides that the local enforcement agency may extend the date by which a building’s initial milestone inspection must be completed upon a showing of good cause by the owner or owners of the building that the inspection cannot be timely completed if the owner or owners have entered into a contract with an architect or engineer to perform the milestone inspection and the inspection cannot reasonably be completed before the deadline or other circumstance to justify an extension. This provides a way to avoid violation while at the same time requiring the associations to make definite commitments to perform the required inspections and reports.