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WHEN THE GOING GETS TOUGH By Eric Glazer, Esq.

WHEN THE GOING GETS TOUGH By Eric Glazer, Esq.

WHEN THE GOING GETS TOUGH

By Eric Glazer, Esq.

It has always been difficult to get volunteers to be on the Board of Directors.  Even when times are good and the building has made repairs and has some money in the bank, you can never count on owners to volunteer their time for a position where on their best day they will be second guessed and criticized.  It’s always touch and go as to whether an election will even be required in most condominiums because there won’t be enough volunteers.  Maybe it’s because the job doesn’t pay too much.

Well, if you thought it was hard to get volunteers for the Board before, you ain’t seen nothing yet.  Members of Boards starting in 2025, and perhaps some Boards getting a jump on the new laws know that they certainly won’t be winning any popularity contests by serving on the board, especially when they prepare the association’s annual budget.  These new Board members will be the ones who have to tell the members of the community that their monthly assessments are about to skyrocket due to:

  1. Mandatory Phase One Inspections;
  2. Probable Phase Two Inspections;
  3. Massive required repairs in order to pass the 25,  30, 40 or 50 year inspections;
  4. The full funding of a reserve account based upon a structural integrity reserve study;
  5. The fact that reserves can no longer be waived.
  6. Massive Increases in the association’s insurance.

These board members will need to sit behind barbed wire and Police “Do Not Cross” tape during the budget meeting.  They will probably want to be escorted to their units after the meeting by security.  Bottom line is they are going to be facing hostile crowds.

Let’s say they make it back to their unit and still wish to remain on the Board.  Now the fun begins.  These board members will have to hire the architects, hire the engineers, hire the contractors, make sure the repairs get made and pay all of the association’s massive bills. They may also have to negotiate a loan from a local bank so that everyone doesn’t have to come out of pocket for all the repairs.  Of course they will also still have the usual responsibilities of Board members such as attending meetings.

So who in the world is going to want to serve on the Board in 2025 when all of these new laws go into effect?  Why would anyone stick their neck out so far?  Well, if you were always a board member, you may not be scared of the responsibilities to come.  On the other hand, if you were shy of becoming a board member before, I don’t doubt that you’re going to remain the same and stay away.  It’s going to get tough ladies and gentlemen.  But will the tough get going and make the association’s Board the best it can be?

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SO WHERE WILL PRICES GO? By Eric Glazer, Esq.

SO WHERE WILL PRICES GO? By Eric Glazer, Esq.

SO WHERE WILL PRICES GO?

By Eric Glazer, Esq.

I think last night’s 60 Minutes episode made it clear that for some, living in their condominium unit may simply become unaffordable.  The question is……which condos will suffer the most and which other forms of housing are most likely to retain their values and even go up.

Everyone is freaking out that all condominium living will soon become insanely unaffordable but that simply isn’t true.  Remember, these new inspection laws only kick in after 25 years if your condo is on the beach or within 3 miles of the coast.  They don’t kick in for 30 years for all other condos.  So, if your condo is new, these new inspections may not apply to you for decades.  Relax.

What else do we know?  Full funding of reserves start in 2025 and they can’t be waived.  Does that spell doom and gloom for everyone?  Not necessarily.  If your condominium has always been doing the right thing and has been fully funding reserves, these new laws requiring the full funding of reserves may not have a financial effect on you at all.   On the contrary, if you have been living in a condominium that has been waiving reserves for years, or even decades, you are in trouble.  You have a lot of catching up to do.  But what did you expect?  You were never putting away money for future repairs?  Did you think your building would never need repairs?  If it did need repairs, did you think these repairs would magically be paid?

Remember, these mandatory inspections, mandatory repairs and mandatory reserves only apply to condominiums of 3 stories or more.  So obviously, if your condominium is under three stories, you won’t be subject to mandatory inspections or mandatory reserves.  Something tells me, your home will be in high demand.

Of course, if you live in an HOA, the new inspection and reserve laws won’t apply to you either.  No doubt in my mind, condo dwellers will soon be looking to switch to the HOA way of life.

If you live in one of those condos above 3 stories that is 30 years of age or older and never reserved a dollar, it’s going to be hard to sell your unit. Buyers are more educated now and realize they would be buying into a financial nightmare.  If you want to sell, your price will definitely have to factor in, what the new buyer is about to pay for those inspections and repairs.

On the contrary, people who own condos under 3 stories or who live in HOAs will be in the driver’s seat as none of these costs will be passed on to their potential buyers.

I’m no realtor……..but this is how I see it.

 

DEVELOPERS ARE ON THE PROWL – By Eric Glazer, Esq.

DEVELOPERS ARE ON THE PROWL – By Eric Glazer, Esq.

DEVELOPERS ARE ON THE PROWL

By Eric Glazer, Esq.

I’m already hearing stories of developers making low ball offers to owners in high rise condominium buildings, offering to buy units at bargain prices. Here’s why…..  Developers knows that in building of 25 years or more on the coast or 30 years or more inland, owners are facing massive upcoming expenses.

These include but are not limited to:

  1. Mandatory fire sprinklers or an engineered life safety system;
  2. A mandatory Phase One Inspection;
  3. A likely Phase Two Inspection which will subsequently result in major repairs being required to the condominium property;
  4. A Structural Integrity Reserve Study and the full funding of reserves.

 It’s going to get mighty expensive to remain living in some condominiums and developers know that many owners simply won’t be able to afford it.  Their strategy is to offer you some money for your unit instead of you having to come out of your pocket tens of thousands of dollars or more.

Developers may rely on simply making an agreement to buy everyone’s unit at the same time and if even one owner decides not to sell, the deal is off.

Developers may also have a strategy where they buy enough units to “terminate” the condominium form of ownership.  Under the current statute the developer may wish to accumulate only 80% of all units.  If so, the developer can then file a plan of “termination.”

the plan must be approved by at least 80 percent of the total voting interests of the condominium. However, if 5 percent or more of the total voting interests of the condominium have rejected the plan of termination by negative vote or by providing written objections, the plan of termination may not proceed.

 

If you read the foregoing statute, clearly developers would want to purchase just in excess of 95% of all units so that nobody can stop the plan of termination.  However, some of you may have language in your governing documents that would require a vote of 100% of the owners in order to terminate the condominium.  The question of whether the magic number is 80%, 95% 100% or some other number depends upon whether you have “Kaufman” language or “as amended from time to time” language in your governing documents.  Believe me, it gets complicated.

The bottom line is that many of you will soon be approached by developers looking for a steal.  When this happens, rather than have infighting among those that live and/or own in the condominium, I urge you to seek the advice of counsel on this very complicated topic.

No doubt older buildings will be toppled by developers who will put new ones in their place.  It may be very unlikely that even though you lived there for decades, you won’t be able to afford the prices in the new condominium.  Ladies and gentlemen, gentrification is coming to a neighborhood near you.

Every Sunday watch and listen…Ask Questions get Answers!

WHY THE DIFFERENCES? By Eric Glazer, Esq.

WHY THE DIFFERENCES? By Eric Glazer, Esq.

WHY THE DIFFERENCES?

By Eric Glazer, Esq.

At a time when it would make sense for the condo and HOA laws to become easier to learn, they are becoming harder.  Much has to do with why in the world are there such differences between the condo and HOA statutes?  It’s actually ridiculous.  For example:

  1. In order to get access to the official records, why does the condo statute allow access if the owner asks for access in writing while the HOA statute requires the owner to request access by certified mail return receipt requested?
  2. Why does the condo statute require condos with 150 units or more to have a website, while an HOA with 150 units or more does not require a website?
  3. Why does the HOA statute allow voting by proxy but the condo statute doesn’t and requires a very strict way of performing the election?
  4. Why do HOA documents expire after thirty years, but the condo declaration never expires?
  5. Why is competitive bidding required in a condo if the amount at issue is 5% of the budget but competitive bidding is required in an HOA if the amount at issue is 5% of the budget?
  6. Why in an HOA, if the owners amend the declaration to prohibit rental terms of less than six months or 3 times in a calendar year, that amendment applies to everyone, even those who did not vote in favor of the amendment ———- however that same amendment would not apply to those who specifically did not vote in favor of the amendment in a condo?
  7. Why does the condo statute require a 75% vote of the owners in order to make a material alteration, yet the HOA statute does not mention material alterations?
  8. Why as of January 1st, 2025 are condominiums required to reserve funds for all portions of the common elements but HOAs are not?

There are more, but you get the point.  There are no reasons of which I’m aware as to why these statutes are different for condos and HOAs, yet they continue to exist.  At a time when it’s confusing enough to learn the laws, The Florida Legislature should amend the statutes so that the laws are the same and fair across the Board, regardless of whether you live in a condo or HOA.

 

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The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years

The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years

  • Posted: Oct 28, 2022
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MANDATORY RESERVES

By Jan Bergemann

Finally the Florida Legislature got the message they should have gotten 20 years ago: FULLY FUNDED RESERVES ARE MANDATORY!

And even if the legislature gave condo owners a reprieve until December 2025, condo owners should start now to consider their options:

Will they be able to afford the much higher maintenance fees they will have to pay monthly in the future or will these much higher fees break their household budget?

Let’s just face it: For most of the years past condo owners waived reserves in order to keep maintenance fees artificially low – meaning that many of the associations at this point don’t have any reserves worth talking about. Remember: According to media reports the Champlain Tower South had only $700,000 in reserves, but needed about $16M to pay for the necessary repairs.

That will have to change real fast and the fact that many of the required inspections will have to be followed up by costly repairs and maintenance high special assessments are on the horizon for many hi-rise buildings (buildings higher than three floors).

As much as this change to the Florida statutes was long overdue it will definitely price quite a few families out of their homes. But in all reality there is really no other way around it and the fact that many condo owners used the loophole in the statutes that allowed waiving the funding of reserves is now coming back to haunt the owners who in former times dismissed the idea of funding reserves.

We already see condo owners protesting against boards about the problems that are visible in these buildings. The big question in these cases: Does the association have the necessary funds to take care of the needed maintenance and repairs or are the owners willing and able to pay the special assessment the board might have to levy in order to pay for the contractor?

The mandatory funding of all the required reserve funds will make living in these hi-rises very interesting in the next two years – and we will have to see how strong the government agencies tasked with overseeing these new provisions in FS 718 are enforcing these provisions.

Our Blog ( Industry Articles ) can be found on SFPMA.com – between our writers and all members of sfpma we have been for over 15 years keeping our industry up to date with the right Legal, Business and Services Articles. SFPMA sends and publishes these and sends to over 230,000 emails keeping everyone informed.

Look for our article upcoming on Condo Funds and Investments, on SFPMA

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IF THERE EVER WAS A TIME TO GET EDUCATED – Update

IF THERE EVER WAS A TIME TO GET EDUCATED – Update

Update:  Eric Glazer, Esq.
Published October 10, 2022

Rumors of my demise have been greatly exaggerated.

I just spent a week in the hospital — again with kidney stone issues.  This is I believe the 5th time I needed some sort of surgery for this never ending painful problem.  I left the hospital with a tube coming out of my right side.  I still need a lithotripsy procedure.  That’s the one where you lay down in water and they zap your kidney stones hoping to break them up.  I’m guessing I have another week or two of this insanity.

I want to apologize to the wonderful people at the L&L Condo and HOA Expos.  As all of you know, I always attend all of their shows all around the state and have the honor of kicking off the event by doing my board certification course.  Unfortunately I won’t be able to attend the events In Palm Beach and in Broward.  I am desperately hoping to attend the events in Orlando and Tampa.  I think all of you know that I love nothing more than being with all of you, teaching you, and answering your questions.  It’s simply my favorite part of being an attorney.  It’s killing me that I can’t teach the classes that so many of you attend each and every year.  However, L&L will be finding another well qualified attorney from another law firm to teach and certify you.  I urge you to attend and continue to make the L&L shows the success that they always are.

I’m taking two weeks off from the radio show.  I expect to do the show October 16th — with or without a tube coming out of my side.  BY THE WAY……THAT’S THE SAME DAY I WILL BE ON 60 MINUTES — AS THEY ARE DOING A SHOW ABOUT WHETHER OR NOT GRANDMA AND GRANDPA CAN STILL MOVE TO A FLORIDA CONDOMINIUM IF THEIR SOLE INCOME IS SOCIAL SECURITY.  I think we all know the answer.   This really should be an amazing show which shines the spotlight on Florida condominiums but truly needs to be watched by the entire country as every state better follow Florida’s lead when it comes to mandating safety.

In any event, I hope to be back at my desk in a week or two and look forward to speaking with all of you again.  In the mean time, please get in touch with Rich, Pennie or Paul if you need immediate help.

PS: The nurse told me that the epidural was not invented to relieve pain from child birth.  It was invented to relieve pain from kidney stones!

 

We know everyone is wishing Eric Glazer a full recovery and well wishes.  Ouch

 

In light of the tragedy at The Champlain Towers in Surfside last year, The Florida Legislature, to its credit, passed massive condominium reform regarding safety, inspections and reserves.  These laws are confusing to those who work in the industry every day, never mind to those who serve on condo Boards throughout the state.

 

Stay up to date with the new law -FLORIDA BUILDING INSPECTIONS (SB-4D)

Florida Condo Building Inspections (SB4d)

http://FLBuildingInspections.com  a division of SFPMA

The State of Florida Property Management Association with Legal & Engineering Members are here to help you understand the new laws and how to take the correct action now to ensure you are in full compliance. 

 

The Florida Legislature thought that it was so important for condo boards to enforce these laws that they included a provision which considers a breach of these laws a breach of the director’s fiduciary duty.  Imagine, personal liability can be imposed against a director who fails to enforce these new laws.

Once again, I drafted legislation which would require Board members to learn these new laws in order to get certified and once again this requirement was removed from the statute.  It’s hard to believe, but The Florida Legislature drafted a law which imposes personal liability against those directors who fail to follow these new laws yet removed the requirement to learn these new laws.  In any event, I will again try to make learning these new laws a condition of becoming certified in the next legislative session.

As far as condominium Board members go…….there can be no more important time than the present to learn these new laws.  They are designed to keep you and your fellow unit owners alive.

Don’t dare get certified by signing that dumb, silly form that says I read my governing docs and promise to enforce them.  Even if you read your governing documents from cover to cover, you still wouldn’t learn any of the new condo laws.  What a disgrace that you can still become certified this way.

I am teaching at the following times and locations this month.  It is more imperative than ever to attend an educational course.  In fact, if you don’t learn the new laws and don’t apply the new laws on your condo board, you can face personal liability.  Moreover, any condo Board member who can’t find a few hours to take an educational course is not worthy of a single vote.  So what do you say?  Please register for any of the free following Condo Craze and HOAs Board Certification Classes offered around the state

Find the Condo & HOA Event Dates

 

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NEW LAWS – WILL THEY AGAIN BE IGNORED BY MANY BOARDS?

NEW LAWS – WILL THEY AGAIN BE IGNORED BY MANY BOARDS?

NEW LAWS – WILL THEY AGAIN BE IGNORED BY MANY BOARDS?

By Jan Bergemann

Year for year we see new community association bills passed, claiming to close more loopholes in laws that have more holes than Swiss cheese. In reality most of these laws are being ignored – or circumvented – because the folks violating these laws are even told by certain attorneys that nothing will happen if they ignore existing laws.

Just take a look at what happened with their ordinances requiring older buildings to have 40-year inspections? Not much, because it seems that nobody ever followed up trying to really enforce these ordinances. After the collapse of the Champlain Towers South people looked into these ordinances – and guess what? In Miami for example, two hi-rise condos were due for the 50-year inspection, but hadn’t even done the 40-year inspection. There were lots of similar examples that many associations plainly ignored these requirements in a timely fashion. That definitely raises the question: Will the enforcement be better now that it is state law?

Many condo-owners plainly refused to vote in favor of fully funded reserves. Did the legislators even ask why before passing a bill that will require fully funded reserves? Definitely not, because otherwise they would have found out that owners didn’t want to fund the reserves for one simple reason: Boards used these reserve funds for all kinds of projects other than intended, and when time came to — for example – have a new roof installed, the roof reserves were empty and a special assessment had to be levied. But what’s the big deal? Instead of a new roof they had nice palm trees when entering the community property.

A bill was offered in the last legislative session that would have taken care of the problem: HB 811 – Condominium Association Complaints and Investigations – filed by Representative Tom Fabricio (R-Miami). But like most of the other bills in the past years that would have created enforcement of all these laws the legislature is enacting on a yearly basis it was clearly ignored.

When will all our elected officials — from county to federal – finally get the message that creating laws without enforcement is just a waste of paper that makes attorneys rich!

 

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SOME OTHER NEW LAWS CONDOS MUST FOLLOW – PART TWO By Eric Glazer, Esq.

SOME OTHER NEW LAWS CONDOS MUST FOLLOW – PART TWO By Eric Glazer, Esq.

SOME OTHER NEW LAWS CONDOS MUST FOLLOW – PART TWO

By Eric Glazer, Esq.

DISTRIBUTION OF THE INSPECTION REPORTS

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.

THE DEVELOPER’S TURNOVER REPORT

Notwithstanding when the certificate of occupancy was issued or the height of the building, the developer must provide a milestone inspection report in compliance with s. 553.899 included in the official records, under seal of an architect or engineer authorized to practice in this state, and attesting to required maintenance, condition, useful life, and replacement costs of the following applicable condominium property common elements comprising a turnover inspection report:

  1. Roof.
  2. Structure, including load-bearing walls and primary structural members and primary structural systems as those terms are defined in s. 627.706. 
  3. Fireproofing and fire protection systems.
  4. Elevators.
  5. Heating and cooling systems.
  6. Plumbing.
  7. Electrical systems.
  8. Swimming pool or spa and equipment.
  9. Seawalls.
  10. Pavement and parking areas.
  11. Drainage systems.
  12. Painting.
  13. Irrigation systems.
  14. Waterproofing
  15. A copy of the association’s most recent structural integrity reserve study.

     

POWERS OF THE DIVISION

So let’s say the developer is ignoring all of these new safety laws.  Does the DBPR have any power to do anything about it?

(1) The division may enforce and ensure compliance with this chapter and rules relating to the development, construction, sale, lease, ownership, operation, and management of residential condominium units and complaints related to the procedural completion of milestone inspections under s. 553.899.

However, Once The Developer Has Turned Over…

(2) However, after turnover has occurred, the division has jurisdiction to investigate  complaints related only to financial issues, elections, and the maintenance of and unit owner access to association records under s. 718.111(12), and the procedural completion of structural integrity reserve studies under s. 718.112(2)(g).

So………..if your Board ignores these new safety laws and you want to do something about it…..it’s off to court.

OTHER NEW CONDO LAWS TO KNOW – PART ONE

OTHER NEW CONDO LAWS TO KNOW – PART ONE

  • Posted: Jul 26, 2022
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SOME OTHER NEW LAWS CONDOS MUST FOLLOW – PART ONE

By Eric Glazer, Esq.

We all know by now the myriad of new safety laws condos that are 3 stories or more are required to follow.  They include mandatory fire sprinklers or an engineered life safety system (for buildings 75 feet or higher only), a Phase One Milestone Inspection after 30 years and every ten years thereafter (25 years if the building is on the coast), a likely Phase Two Inspection which will result in required repairs to the structure and of course structural integrity reserve studies performed by an architect or engineer and the mandatory full funding of reserve accounts.

There’s actually more to know.

OFFICIAL RECORDS TO INCLUDE  AND BE POSTED ON THE ASSOCIATION’S WEBSITE:

  1. All audits, reviews, accounting statements,structural  integrity reserve studies, and financial reports of the association or condominium. Structural integrity reserve studies  must be maintained for at least 15 years after the study is completed.

 

A copy of the inspection reports for the milestone inspections and the structural integrity reserve studies  and any other inspection report relating to a structural or life safety inspection of the condominium property. Such record must be maintained by the association for 15 years after receipt of the report.

NO LONGER IS THERE THE ABILITY

TO WAIVE RESERVES OR USE THEM FOR OTHER PURPOSES

 

It was always ridiculously easy to waive the funding of the reserve account.  All it took was a lousy majority of a quorum.  Those days are now over and reserve accounts must be fully funded, like it or not.

The same rule finally applies to developers.  Before turnover of control of an association by a developer to unit owners other than a developer under 718.301, the developer-controlled association developer may not vote the voting interests allocated to its units to waive the reserves or reduce the funding of the reserves.

You can no longer vote to use reserves set aside for one category to be used to repair another category.  Effective December 31, 2024, members of a unit-owner controlled association may not vote to use reserve funds, or any interest accruing thereon, that are reserved for items listed in paragraph (g) for any other purpose other than their intended purpose.

(g) Structural integrity reserve study.

  1. 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:
  2. Roof. 
  3. Load-bearing walls or other primary structural members.
  4. Floor. 
  5. Foundation.
  6. Fireproofing and fire protection systems. 
  7. Plumbing. 
  8. Electrical systems. 
  9. Waterproofing and exterior painting. 
  10. Windows.
  11. 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.
  12. Before a developer turns over control of an association  to unit owners other than the developer, the developer must have a structural integrity reserve study completed for each building on the condominium property that is three stories or higher in height.

 

  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.

BREACH OF FIDUCIARY DUTY – THIS IS SCARY

 

  1. 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).  If you’re an officer or director, this new law should scare you to death.  If you fail to do the reserve study, you have automatically breached your fiduciary duty.  This could potentially result in individual liability against a director should the failure to do the reserve study result in collapse or injury.

 

(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).  Again, If you’re an officer or director, this new law should scare you to death.  If you fail to do the milestone inspection, you have automatically breached your fiduciary duty.  This could potentially result in individual liability against a director should the failure to do the reserve study result in collapse or injury.

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