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Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Federal Court Identifies Potential Collection Issue for Community Associations in Florida

Community association operations rely upon the timely and full payment of all assessments by all of the owners. One of the mechanisms that Florida law provides to put associations in a stronger position when an owner becomes delinquent is the “secured interest” of the association in the unpaid assessments by way of its ongoing lien against the unit or lot for the unpaid assessments. This secured interest puts the claim of the association at a higher priority than most other claims, other than a first mortgage or unpaid property taxes. However, a recent decision in the United States Bankruptcy Court for the Southern District of Florida, In re: Adam, Case No.: 22-10140-MAM, September 23, 2022, has cast a potential cloud on that secured interest.

In the In re Adam case, the Association previously obtained a judgment of foreclosure for over $76,000, which was considered as a secured interest by the Court. The Association was also claiming an additional $36,558 which came due after the judgment was entered. The owners were asking the Court to decide that the $36,000 was not secured and therefore uncollectible in the bankruptcy (or at least not fully collectible).

In deciding whether certain association claims were secured and collectible in the bankruptcy setting, the Court undertook an analysis of Florida law on the subject. The Court noted that both the Florida Condominium Act (Chapter 718 F.S.) and the Homeowner’s Association Act (Chapter 720 F.S.) currently contain express provisions that identify that the lien of the association is effective from the original recording of the declaration (with the added requirement in HOA’s that the declaration specifically expresses this lien right). However, the Court also points out that the Condominium Act was amended in 1992 to provide for this effective date. (The Homeowner’s Association Act was amended to provide for it in 2008.) Prior to these amendments, these Statutes provided for the effective date of the lien to be when it was recorded in the public records of the county. The analysis of the Court required it to consider whether the current version of the Statute applies to the situation or whether an earlier version of the Statute is the controlling authority. (This case involved a condominium so only the Condominium Act was considered in the decision.)

To make that determination, the Court applied the principles of the seminal case of Kaufman v. Shere, 347 So.2d 627 (Fla. 3d DCA 1977), which require declarations to contain the specific phrase “as amended from time to time” when identifying the Statute that governs the documents in order for the current version of the Statute to apply. This is because Statutes are not retroactive in their application unless the legislature expressly makes them so in the Statute itself. Both the U.S. and Florida Constitutions do not allow for the State to make a law that infringes upon the vested rights in an existing contract (which would be the declaration). As a result, the contract (declaration) would need to have the specific “as amended from time to time” language (often called “Kaufman” language) to automatically incorporate changes to the Statute that is not otherwise retroactive.

When the Court reviewed the governing documents, it noted that they were from 1987 and did not have the Kaufman language. As such, the Court held that the provisions of the declaration were the same as the Statute in 1987, which provided that the lien was effective only upon being recorded in the public records of the county. Since the Association did not file another lien for the amount being claimed subsequent to the foreclosure judgment, the Court concluded that this portion was not secured. In the bankruptcy setting, this meant that the Association would likely be unable to recover most, if not all of this claim from the Debtors, Mr. and Ms. Adam.

While this issue may be most relevant to associations when dealing with a case in bankruptcy, it is possible that it could also be raised in state court foreclosure cases under certain circumstances. It is also important to note that this Bankruptcy Court did not include a significant issue in the analysis regarding the Statute at issue, that being whether or not the statutory provision was “substantive” or “procedural”, as those terms apply to this situation, which could have led to a different result. (This portion of the legal analysis is quite technical and beyond the scope of this article.)

For communities whose declarations were recorded prior to the statutory changes described above, the first step in protecting the interests of the association is to review the documents to determine whether Kaufman language is already in them. If not, the board may wish to consider proposing an amendment to the owners to change the documents to include this language, if not for the entire declaration, then at least for the timing of the effectiveness of the lien of the association. Having qualified legal counsel review these issues in the documents is a strong business practice.

About Robert
Robert L. Kaye is Board Certified in Condominium and Planned Development Law. Mr. Kaye attended Michigan State University, graduating with a B.B.A. in General Business in 1976. In 1986, Mr. Kaye graduated from the Detroit College of Law, magna cum laude. Mr. Kaye initially practiced tax law for the firm of Raymond, Rupp, Weinberg, Stone & Zuckerman, P.C. in Troy, Michigan, before moving to South Florida in 1987, joining Becker & Poliakoff to concentrate in the area of community association representation. In 1991, Robert Kaye left that employ to start Kaye & Roger, P.A. He was the managing shareholder of the Firm from its inception, directing all legal operations and overseeing its growth to represent over 1,000 Communities in South Florida at the time of its name change to Robert Kaye & Associates, P.A. on January 1, 2003.
On January 1, 2009 Mr. Kaye joined with Michael Bender to form Kaye & Bender, now known as Kaye Bender Rembaum, after Jeffrey Rembaum joined in 2012. Mr. Kaye serves on the Florida Bar’s Grievance Committee, is a member of the Condominium Committee of the Real Property Section of The Florida Bar, and previously served on the Committee on the Unlicensed Practice of Law. He also lectures on Community Association law and is regularly published on the subject. Mr. Kaye hosts KBR’s appearances on the radio show, ‘Ask the Experts’, from 6pm to 7pm, the first Thursday of each month.
See his full bio HERE.

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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!

10 Tips to Maximize Your Property Insurance Claim by The Maus Law Firm

10 Tips to Maximize Your Property Insurance Claim by The Maus Law Firm

  • Posted: Nov 03, 2022
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10 Tips to Maximize Your Property Insurance Claim

by The Maus Law Firm  / Call (954) 784-6310  now for a free consultation.

 

#1). Take photos of the damage, right away.

#2 Don’t Let the Problem get Worse.

If you have roof damage, add a tarp to cover the damage. Your insurer will not cover you for damage that you could have prevented. You will be able to claim reimbursement for these temporary repairs

#3) Save your receipts

#4) Preserve or Save Damaged Items.

You will want to clean up and throw out items that are beyond repair – They are evidence, so show your insurance adjuster.

#5) If damage affects your neighbor, do not communicate or argue with them. Too many neighbors start disputes without realizing that their own insurance companies have a different views.

#6) Prepare a complete home inventory. Plan ahead of time. It will save you time and money.

#7) Your home inventory may include more items than you think.
Did you know interior AND exterior and landscaping items might be covered by your policy? Check to see if your policy covers food and sundries. Add up how much it will cost to restock the pantry and freezer.

#8) Examine the damage before the adjuster arrives.
You know your home better than anyone. Point out cracks, or breakage, indicating structural or related damage.

#9) Get your own repair estimates from contractors.

#10) Keep a log of all communications regarding your claim.
Include written correspondence, phone calls, voice mails, and email messages with your insurance company, contractors.
Be vigilant in monitoring bills and receipts.

 

The reality of the insurance business is that companies exist to make money. They need to minimize the amount of claims it pays out; while, maximizing the premiums that it collects.

Hiring the best Fort Lauderdale property damage insurance claims lawyer you can find, will save you the headache later. We will competently and aggressively represent you in your homeowner property damage insurance claim, or commercial business insurance claim.

 

Local: 954.784.6310

Email: Jmaus@mauslawfirm.com

 

 

 

 

 

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Condo Deconversion: The Good, The Bad, and the Reality

Condo Deconversion: The Good, The Bad, and the Reality

  • Posted: Oct 21, 2022
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Condo Deconversion: The Good, The Bad, and the Reality

There’s a lot of turmoil in the housing industry today, and it’s hitting community associations hard. New restrictions from Fannie and Freddie are dark clouds full of special assessments looming on the horizon, and the housing bubble is growing rapidly with no real signs of stopping, inviting investors and tempting homeowners to sell. Because of all of this, a lot of condominium associations are considering a tactic called “condo deconversion.”

A condo deconversion is basically a bulk sale and process by which all units in a condominium building are sold in one transaction to a real estate investor, who will then turn the property into rental apartments. (Its counterpart is “conversion” which is when an apartment community is converted into a condominium or co-operative and sold off. Even though the terms are connected, there’s no requirement that a condo building was previously converted in order to be deconverted.)

Deconversion might sound like an extreme option, but it’s quickly becoming a sought-after fix for communities struggling with expensive deferred maintenance issues.

Why Condo Deconversion Is Gaining Popularity

There are a lot of reasons why this trend is taking off. Those FNMA and FHLMC restrictions, for example, are about to start causing some serious problems for condo boards. Requiring that the condo buildings meet a specific level of health by withholding approval for any future purchase loans for units in the community is stressful for everyone involved, and can often only be

Buildings get old and need repairs.

Building repairs are time-consuming and costly, and only get more expensive as buildings start hitting 30 and 40 years old. Communities with underfunded reserves will likely be subjected to overwhelming special assessments to catch up on the deferred capital improvements and maintenance over the years. The current real estate market means that deconverting could offer an alternative where unit owners get out with a profit rather than pouring money into special assessment costs.

New special inspections being ordered by local municipalities, state statutes, or federal restrictions.

The condominium lobby and real estate lobby will go kicking and screaming, fighting new inspection and reserve laws. Yet eventually condominiums are going to be forced to do the right thing and keep up with maintenance, capital improvements, reserve studies, and funding. It’s the right way to govern a condominium, but very infrequently is the right way the cheap way. These new inspections will be costly and time-consuming, and will likely expose more problems that only money can solve, exposing an underfunded community for the money-pit that it has slowly become. Selling in bulk to an investor pushes that responsibility onto someone else while pocketing a bit of profit.

There aren’t enough rental properties.

Condominiums have been popular in the last 20 years but there is a tremendous supply gap in rental properties, and this is a way for real estate investors and developers to acquire properties without having to build them. With the cost of construction, it makes more sense to take an old building, even an old building with long-deferred maintenances and problems, rather than invest in wholly new construction. It saves time and allows for a far quicker return on investment. It’s a sound move to buy them out and rehab the structure.

The price of real estate has skyrocketed.

The housing market is experiencing yet another quickly-growing bubble. Condo deconversions would typically start at 9x rent roll (the cumulative value of projected monthly rents for all of the units in the building), but some communities are seeing negotiations beginning as high as 20x rent roll! As Don Corleone would say “it’s an offer they cannot refuse.” For a condominium facing a $150,000 special assessment, they may feel that it would be foolish to refuse such a lucrative offer. Why pay a special assessment when you can ride the high of the real estate bubble?

What Does Condo Deconversion Mean For Owners and Board Members?

Condo deconversion is not a cut-and-dry good or bad decision. It’s a complicated process and has pros and cons on every side.

The good is that it can offer hefty profits and a get-out-of-jail-free card in a way. For some owners, it can mean a massive profit and an incredible opportunity to escape a very expensive, long-term situation. For board members who are stuck with the neglect from previous board decisions, it can mean walking away from a series of problems for which you would have been unfairly blamed.

The downsides, however, can be drastic and dangerous for owners:

Loss of Guaranteed Residence

For some, it means being forced out of their homes, into an increasingly hostile real estate landscape with no time to accommodate a drastic life change. Some states, like Florida, are experiencing the lowest housing inventory in the state’s history, meaning some may make a fortune over what they paid for their condo unit only to have to pay that fortune forward, and then some, just to find a new roof to put over their heads. Or, they could get stuck renting the home they previously owned at a severely increased monthly payment.

Loss of Long-Term Equity For Short-Term Gains

Homeownership provides security for yourself and your future generations. For those stuck renting from their new landlord, you lose the ability to pass on equity to your heirs. Unit owners can also no longer get a loan based on mortgage equity or use their home to guarantee a large purchase or supplement legal aid.

Loss of Influence in Your Community

As a member of a community association, you have power. You have a say in every issue that the community faces. You can determine who represents you on the board. You can even run to be part of that board! By deconverting your condo association, those residents that remain forfeit their power to the new landlord. The landlord decides what will and will not be repaired, and when. Once the landlord takes control, they can raise rents as high as they want, regardless of the negotiated rent roll they purchased the property for. There is no requirement to seek approval from residents the way an association board is required to seek approval for the annual budget.

Requirements For Deconverting Your Condo Association

Depending on the state, you do not need a unanimous vote to terminate an HOA or a condominium association, so even if there are objections it can happen to most condominium associations. In Florida, for example, if an investor buys 80% of the condo units, the last 20% can be compelled to sell if the condo has been deconverted. In fact, as of 2007, 80% of owners can allow for a Florida condo deconversion if more than 10% of the total ownership did not object. Other states will have their own provisions for condo association termination, so be sure to check your state’s legislation.

Some owners may argue that the association’s board needs owner approval before it can even begin looking into the possibility of a sale. In reality, the board has a fiduciary duty to bring all the best value and opportunity to the owners they represent, meaning that they can and should be researching opportunities like deconversion if the benefit is great enough.

Can the board sell out the condominium from under the owners? No. They will still be required to get the state’s minimum approval percentage within the community. And if there are condo deconversion negotiations going on, the board has an obligation to keep the membership informed and should provide full transparency.

Revitalizing Your Condo Community

Deconversion is an enticing opportunity for condo communities facing mounting special assessments or dues increases to confront long-term deferred maintenance. And while it might be the right choice for your condo building, it is not as simple as just pushing a button and making everything disappear. It’s a decision that requires a lot of thought, due diligence, and communication with your community.

While you can’t go back in time and undo the maintenance deferment of boards past, you can do the right thing for your community today and start a conversation about the importance of building integrity and health, and how the benefits will always outweigh the cost. Your condominium building needs a diligent board of directors working for the good of the community. It requires regular maintenance, capital improvements, fully-funded reserves, good cash flow, and a proper delinquency and ethical collections solution. Call Axela to let us help you recover some of those missing funds by collecting on your delinquent assessments, and avoid deconverting your condo association.

 

EVENT: Jeffrey Rembaum (KBR Legal) will lead a substantive review of Bill SB-4D (Condo & Cooperative building safety) on October 17th

EVENT: Jeffrey Rembaum (KBR Legal) will lead a substantive review of Bill SB-4D (Condo & Cooperative building safety) on October 17th

SIGN UP NOW to WATCH this WEBINAR

Jeffrey Rembaum will lead a substantive review of Bill SB-4D

(Condo & Cooperative building safety) on October 17th.

Please see the flyer for details and share with anyone who will benefit from this.

The link to RSVP is: https://us02web.zoom.us/webinar/register/WN_w-aSiEr6SAqNuNmd-tUJsA

 

Bill SB-4D Has Passed…Now What? A Panel Discussion

In May of 2022 new building safety legislation was passed during a special session. Join us for this important informational discussion as Jeffrey Rembaum, Esq. BCS of Kaye Bender Rembaum will provide a substantive review of Bill SB-4D. Attendees will learn about the history of the bill, how your association is affected and what you may need to do.

Other professionals on hand will include Nicole Johnson-Pendergrass & William Kilgallon (Haferco CPAs & Consultants), Jayme Gelfand, PCAM (Truist Bank), Rudy Martin (m2e Consulting Engineers) and Brian Street (Castle Group).

Note: This webinar is for informational purposes only and does not contain CE credit for CAMS.

Learn more on the New Website on the State of Florida PMA website. 

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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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It is essential for condominium associations to ensure that their buildings are in compliance with the requirements of the Florida Fire Prevention Code

It is essential for condominium associations to ensure that their buildings are in compliance with the requirements of the Florida Fire Prevention Code

  • Posted: Sep 22, 2022
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It is essential for condominium associations to ensure that their buildings are in compliance with the requirements of the Florida Fire Prevention Code

It is essential for condominium associations to ensure that their buildings are in compliance with the requirements of the Florida Fire Prevention Code (the “Fire Code”). For the safety of all residents, associations must ensure they stay up to date with the latest and greatest in fire safety provisions. One of these essential safety features is a requirement that systems be built into new and existing buildings to ensure that first responders’ radios will work throughout buildings in an emergency situation. Pursuant to Section 11.10.1 of the Fire Code, “in all new and existing buildings, minimum radio signal strength for fire department communications shall be maintained at a level determined by the AJH [the authority having jurisdiction]. Additionally, Section 11.10.2. provides that where required by the authority having jurisdiction, two-way radio communication enhancement systems must comply with the requirements of the Fire Code.

When originally adopted, the requirements of Sections 11.10.1 and 11.10.2 of the Fire Code applied only to new buildings, so the requirement was not a burden on existing buildings. However, in 2013, the Fire Code was updated as set out above to provide that all new and existing buildings must maintain adequate fire department radio signal strength inside the building. This new requirement applied to all buildings and did not provide a grace period. This posed a significant problem for many high-rise condominiums, as the installation of the necessary equipment involves opening walls and ceilings and can be quite costly to the association. The cost of such installation was a substantial burden to condominiums, not expecting to be required to install same, and therefore never budgeted for the installation.

Recognizing the problem, in 2016 the Florida Legislature adopted section 633.202(18), Florida Statutes, which provided a grace period for high-rise buildings. Existing high-rise buildings were not required to comply with minimum radio strength for fire department communications until January 1, 2022. You may be thinking, “that date is passed”, but do not panic. If your condominium has not yet complied with the requirements, have no fear. The 2021 Florida Legislature amended section 633.202(18), Florida Statutes, to provide another extension for compliance.

In accordance with the newly amended statute, existing high-rise buildings now have until January 1, 2025 to come into compliance with the requirements. However, the association must apply for an appropriate permit for the required installation by January 1, 2024. More specifically, section 633.202(18), Florida Statutes, is amended to provide, in pertinent part, that:

The authority having jurisdiction shall determine the minimum radio signal strength for fire department communications in all new high-rise and existing high-rise buildings. Existing buildings are not required to comply with minimum radio strength for fire department communications and two-way radio system enhancement communications as required by the Florida Fire Prevention Code until January 1, 2025. However, by January 1, 2024, an existing building that is not in compliance with the requirements for minimum radio strength for fire department communications must apply for an appropriate permit for the required installation with the local government agency having jurisdiction and must demonstrate that the building will become compliance by January 1, 2025. Existing apartment buildings are not required to comply until January 1, 2025…

Therefore, all existing high-rise buildings must come into compliance by January 1, 2025. It is important to note that this time extension applies only to high-rise buildings. By way of over simplification, it does not apply to buildings less than 75 feet tall (the measurement can be tricky, so if your building is close to 75 feet check with your association attorney regarding this measurement). In 2018, the Florida Department of Financial Services, Division of State Fire Marshal issued a Declaratory Statement finding that section 633.202(18), Florida Statutes does not apply to the enforcement of Section 11.10 of the Fire Code to buildings under 75 feet in height. Therefore, if your building is less than 75 feet in height, it is required to comply with the radio signal strength required by the authority having jurisdiction at this time.

In light of the foregoing, it is essential that your association take action to determine whether sufficient fire department radio signal exists in your building. The minimum requirements may differ by jurisdiction, and we recommend the association reach out to the local fire code official to determine the requirements for your jurisdiction. If sufficient signal does not exist in your building, it is essential to prepare a plan (including design, permits, financing, etc.) to ensure that your building will comply by the deadline of January 1, 2025.

The law firm of Kaye Bender Rembaum, with its 20 lawyers and offices in Broward, Palm Beach and Hillsborough Counties, is a full service law firm devoted to the representation of more than 1,200 community and commercial associations, developers, and their members throughout the State of Florida. Under the direction of attorneys Robert L. Kaye, Michael S. Bender and Jeffrey A. Rembaum, the law firm of Kaye Bender Rembaum strives to provide its clients with an unparalleled level of personalized and professional service that takes into account their clients’ individual needs and financial concerns.

The Firm is ranked ninth in South Florida and 62nd in the Southern U.S. among “Top 300 Small Businesses” by Business Leader magazine.

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Searching for Money: A Condominium Association’s Guide to Acquiring Financing by Becker

Searching for Money: A Condominium Association’s Guide to Acquiring Financing by Becker

  • Posted: Sep 21, 2022
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Searching for Money: A Condominium Association’s Guide to Acquiring Financing

by Steven B. Lesser  of Becker

A Condominium Association enjoys broad powers based upon Chapter 718, Florida Statutes, otherwise known as “The Florida Condominium Act.” Despite the guidance provided by the statute and case law which interprets it, little has been written to guide Condominium Associations when borrowing funds to finance various projects.

Associations often borrow money to build capital improvements such as clubhouses; perform extensive remedial work and to buy out recreational leases. Associations must be careful to review its own condominium documents to evaluate whether limitations exist on the right to borrow. This article will discuss the practical considerations to be addressed by a Condominium Association when borrowing funds.

 

Review Of The Condominium Documents
The condominium documents including the Declaration of Condominium, Articles of Incorporation and By-laws dictate how money can be raised to fund certain projects. the procedure to be followed depends upon the purpose for raising such funds. To the extent that the Association desires to perform maintenance work to its own property or common elements, money can be raised by passing a special assessment on its unit owners pursuant to Section 718.116, Florida Statutes. Most condominium documents provide the Association with the authority to borrow funds for such purposes without acquiring unit owner consent. However, to the extent that the Association desires to buy out a recreation lease, build a clubhouse or otherwise perform material alterations or acquire substantial additions to the common elements or to Association property, unit owner approval is necessary. Section 718.113, Florida Statutes provides that if the Declaration of Condominium is silent on the percentage of unit owners required to approve such activities seventy-five (75%) percent shall govern.

 

Where To Seek Financing
Once the Association has determined the purpose in raising funds, a source of financing must be located. Financing is often sought when the Association is unable to raise sufficient funds through a special assessment of its members. In many instances, some or all members may not have the money to pay a large lump sum assessment. Typically, an Association will first attempt to look to acquire financing from the bank that handles its operating account. However, the Association should not view the bank as its only source. Often times, members of the Association’s Board of Directors or unit owners may have personal contacts with a lender that is able to provide more favorable rates and flexibility in terms of structure and cost of financing. In some circumstances, a willingness to shift the Association’s operating account to another lender will provide the Association with leverage to acquire the most favorable financing program.

 

Structuring The Deal
Once the Association has acquired authorization to borrow money and has located a lending institution, structuring the deal becomes the next significant step.

It is not unusual for an Association to borrow in excess of $ 1 Million to finance the purchase of recreational lands from a Developer or to perform significant renovation work to remedy structural defects such as those associated with balconies located in close proximity to the ocean. Lending institutions, with the assistance of counsel for the Association, can be creative in formulating a plan to achieve the financial goals of the Association. The most significant aspect is how the lending institution will secure its loan to the Association.

Unlike other private entities and individuals, a Condominium Association has the statutory right to raise money by a special assessment of its members. Under this scenario, a unit owner’s failure to pay a special assessment will constitute a lien on each condominium parcel for any unpaid assessments. The lien for unpaid assessments will also be subject to an award of interest and reasonable attorney’s fees incurred by the Association to collect or enforce the lien. This statutory right to pass and enforce a special assessment provides security to a lending institution that elects to lend money to an Association. Consequently, a lender will often accept an Assignment of the Association’s right, title and interest in and to all current and future assessments made by the Association against its unit owner members for the purposes of timely payment of all sums due to a lender. For example, an agreement for the purchase of a recreation lease and underlying property between an Association and lender will often include an Assignment which provides as follows:

“The Association hereby irrevocably and unconditionally assigns all of its right, title and interest in and to all special assessments now existing or hereinafter levied by the Association against its unit owner members which are made for the purposes of repayment of the loan or the payment of rent under any lease or lease on real property owned by the Association.”

The foregoing procedure provides the lender with assurance that the loan will be repaid. However, financing a special assessment is expensive when considering loan and interest charges. Certain unit owners may be opposed to being assessed finance charges when they are financially capable of paying the special assessment in a lump sum at the time the loan is acquired. Should a number of unit owners have the ability to pay the special assessment in a lump sum, this process would reduce the total amount of money to be borrowed by the Association along with incidental finance charges.

As a special assessment constitutes an encumbrance on property, the Association would negotiate elimination of any prepayment penalty charges should the loan in whole or in part be paid early. Consequently, elimination of a pre-payment penalty clause would enable the Association or a unit owner to avoid additional finance charges should they pay off the debt prior to the maturity date.

 

Typical Costs Associated With Financing
Should the Association elect to mortgage its property to acquire financing the following fees will be generated:

Bank loan fees, Bank counsel fees, corporate searches, Survey, Title insurance costs, accounting costs, Documentary stamps, Intangible documentary stamps on the amount of the note and mortgage, Environment assessment of property, Recording charges, The cost of amending the condominium documents if additional property is acquired by the Association.

The Association and its counsel should attempt to discuss and negotiate the above-listed fees with the lending institution prior to signing a commitment letter. The Association should never sign a commitment letter without first consulting with counsel. Once the commitment letter is signed, the Association may be obligated to pay a non-refundable fee. Moreover, attempting to re-negotiate the terms of the loan may delay the process as it would require reconsideration by the loan committee.

 

Conclusion
In closing, a condominium Association must identify its purpose in raising funds. The purpose of raising funds will dictate the procedure to be followed. If funds are to be raised for maintenance repairs, a special assessment can be passed without unit owner consent. Condominium documents typically authorize the Board of Directors of a Condominium Association to borrow funds without owner consent. However, certain condominium documents may require unit owner approval. To the extent that the Association elects to borrow funds to perform material alterations or to acquire a substantial addition to Association property, the condominium documents will govern the procedure to be followed. If the condominium documents are silent, seventy-five (75%) percent unit owner approval must first be acquired before a special assessment can be passed pursuant to Section 718.113 (2), Florida Statutes.

When attempting to acquire financing, look to the members of Association’s board of directors and its unit owners to identify lender’s that can provide the most favorable rate. The bank handling the Association’s operating account is often the best source of financing and may be willing to negotiate certain costs associated with financing. Likewise, conferring with an attorney that specializes in association work can often assist you in reducing the costs associated with obtaining a loan.

Most importantly, shop around and take advantage of the collective financial strength of the Association and its unit owner members.

Steven B. Lesser

Shareholder

Ft. Lauderdale

 954.987.7550

 SLESSER@beckerlawyers.com

 

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Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements

Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements

Mandatory Condominium & Cooperative Building Inspections and Non-Waivable Reserve Requirements

by Kaye, Bender, Rembaum KBRLegal.com

With home insurers leaving Florida in droves, and following pressure from members of both political parties in the legislature to actually do something about it, in May 2022, the governor called a special legislative session to address the problem. A very real concern to the insurers is the effect of both time and inclement weather on Florida’s aging high-rise buildings. Until now, and for the most part, Florida law largely ignored these concerns. Enter Senate Bill 4-D (SB 4-D), which already became effective upon being signed into law by Governor DeSantis on May 26, 2022. This new piece of legislation addresses condominium and cooperative building inspections and reserve requirements. (While this article primarily addresses these new laws in the context of condominium association application, they are equally applicable to cooperative associations.)

By way of background, during the regular legislative session, there were several bills introduced in the Florida House of Representatives and in the Florida Senate addressing building safety issues, but none of them were passed into law due to the inability to match the language of the bills in both the house and the senate which is a requirement for legislation to pass and go to the governor for consideration. As such, it was a little surprising to many observers that the legislature was able to approve SB 4-D in essentially a 48-hour window during the special session in May. The language used in SB 4-D was initially drafted into a proposed bill in November 2021. At that time and during the most recent legislative session, input was provided by many industry professional groups including engineers, reserve study providers, and association attorneys. Many of these industry professionals indicated that there were challenges with some of the language and concepts being proposed in SB 4-D during session.

Notwithstanding these challenges and in an effort to ensure some form of life safety legislation was passed this year, SB 4-D was unanimously approved in both the house and senate and signed by the governor. A plain reading of this well-intended, but in some instances not completely thought-out, legislation evidences these challenges. Some will say it is a good start that will need significant tweaking, which is expected in the 2023 legislative session. Others praise it, and, yet others say it is an overreach of governmental authority, such as an inability to waive or reduce certain categories of reserves. You be the judge. We begin by examining the mandatory inspection and reserve requirements of SB 4-D.

 

I. Milestone Inspections: Mandatory Structural Inspections For Condominium and Cooperative Buildings. (§553.899, Fla. Stat.)

You will not find these new milestone inspection requirements in Chapters 718 or 719 of the Florida Statutes, but rather in Chapter 553, Florida Statutes, as cited above.

Milestone Inspections

The term “milestone inspection” means a structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems. The aforementioned terms are defined in §627.706, Florida Statutes, and are to be carried out by a licensed architect or engineer authorized to practice in this state for the purposes of attesting to the life safety and adequacy of the structural components of the building and, to the extent reasonably possible, 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. The purpose of such an inspection is not to determine if the condition of an existing building is in compliance with the Florida Building Code or the fire safety code.

Substantial Structural Deterioration

The term “substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. The term does not include surface imperfections such as cracks, distortion, sagging, deflections, misalignment, signs of leakage, or peeling of finishes, unless the licensed engineer or architect performing the phase one or phase two inspection determines that such surface imperfections are a sign of substantial structural deterioration.

Milestone Inspections For Buildings Three Stories or More In Height

A condominium association under Chapter 718 and a cooperative association under Chapter 719 must have a milestone inspection performed for each building that is three stories or more in height by December 31 of the year in which the building reaches 30 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

Within Three Miles of Coastline

If the building is three or more stories in height and is located within three miles of a coastline, the condominium association or cooperative association must have a milestone inspection performed by December 31 of the year in which the building reaches 25 years of age, based on the date the certificate of occupancy for the building was issued, and every 10 years thereafter.

The condominium association or cooperative association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance.

The condominium association or cooperative association is responsible for all costs associated with the inspection.

If The Certificate of Occupancy was Issued Before July 1, 1992

If a milestone inspection is required under this statute and the building’s certificate of occupancy was issued on or before July 1, 1992, the building’s initial milestone inspection must be performed before December 31, 2024. If the date of issuance for the certificate of occupancy is not available, the date of issuance of the building’s certificate of occupancy shall be the date of occupancy evidenced in any record of the local building official.

Upon determining that a building must have a milestone inspection, the local enforcement agency must provide written notice of such required inspection to the condominium association or cooperative association by certified mail, return receipt requested.

Within 180 days after receiving the written notice, the condominium association or cooperative association must complete phase one of the milestone inspection. For purposes of this section, completion of phase one of the milestone inspection means the licensed engineer or architect who performed the phase one inspection submitted the inspection report by email, United States Postal Service, or commercial delivery service to the local enforcement agency.

A Milestone Inspection Consists of Two Phases

(a) PHASE 1—For phase one of the milestone inspection, a licensed architect or engineer authorized to practice in this state must perform a visual examination of habitable and non-habitable areas of a building, including the major structural components of a building, and provide a qualitative assessment of the structural conditions of the building. If the architect or engineer finds no signs of substantial structural deterioration to any building components under visual examination, phase two of the inspection (discussed below) is not required. An architect or engineer who completes a phase one milestone inspection shall prepare and submit an inspection report.

(b) PHASE 2—A phase two of the milestone inspection must be performed if any substantial structural deterioration is identified during phase one. A phase two inspection may involve destructive or nondestructive testing at the inspector’s direction. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building. When determining testing locations, the inspector must give preference to locations that are the least disruptive and most easily repairable while still being representative of the structure. An inspector who completes a phase two milestone inspection must prepare and submit an inspection report.

Post-Milestone Inspection Requirements

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:

  1. Bear the seal and signature, or the electronic signature, of the licensed engineer or architect who performed the inspection.
  2. Indicate the manner and type of inspection forming the basis for the inspection report.
  3. 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.
  4. State whether unsafe or dangerous conditions, as those terms are defined in the Florida Building Code, were observed.
  5. Recommend any remedial or preventive repair for any items that are damaged but are not substantial structural deterioration.
  6. Identify and describe any items requiring further inspection.

Local Government Enforcement

A local enforcement agency may prescribe timelines and penalties with respect to compliance with the milestone inspection requirements.

A board of county commissioners may adopt an ordinance requiring that a condominium or cooperative association schedule or commence repairs for substantial structural deterioration within a specified timeframe after the local enforcement agency receives a phase two inspection report; however, such repairs must be commenced within 365 days after receiving such report. If an association fails to submit proof to the local enforcement agency that repairs have been scheduled or have commenced for substantial structural deterioration identified in a phase two inspection report within the required timeframe, the local enforcement agency must review and determine if the building is unsafe for human occupancy.

Board’s Duty After Obtaining The Milestone Report

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 or cooperative 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.

Who Pays for The Milestone Inspection?

Pursuant to §718.112, Florida Statutes, if an association is required to have a milestone inspection performed, the association must arrange for the milestone inspection to be performed and is responsible for ensuring compliance with all of the requirements thereof. The association is responsible for all costs associated with the inspection.

Failure to Obtain the Milestone Inspection

If the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed pursuant to §553.899, Florida Statutes, such failure is a breach of the officers’ and directors’ fiduciary relationship to the unit owners.

Manager’s Duty

If a community association manager or a community association management firm has a contract with a community association that has a building on the association’s property that is subject to milestone inspection, the community association manager or the community association management firm must comply with the requirements of performing such inspection as directed by the board.

Exemptions

For clarity, the otherwise required milestone inspection does not apply to a single family, two-family, or three-family dwelling with three or fewer habitable stories above ground.

Florida Building Commission Requirements

The Florida Building Commission must review the milestone inspection requirements and make recommendations, if any, to the legislature to ensure inspections are sufficient to determine the structural integrity of a building. The commission must provide a written report of any recommendations to the governor, the president of the senate, and the speaker of the house of representatives by December 31, 2022.

The Florida Building Commission must consult with the State Fire Marshal to provide recommendations to the legislature for the adoption of comprehensive structural and life safety standards for maintaining and inspecting all types of buildings and structures in this state that are three stories or more in height. The commission must provide a written report of its recommendations to the governor, the president of the senate and the speaker of the house of representatives by December 31, 2023.

II. Structural Integrity Reserve Studies and Mandatory Reserves:

The reserve legislation set out in §718.112 (f)(2)(a), Florida Statutes, is, for all intents and purposes, re-written. Prior to examining these most recent revisions, it is necessary to first examine the definitions set out in §718.103, Florida Statutes, where a brand-new term is added as follows:

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 applicable to all condominiums and cooperative buildings 3 stories or higher. 

Hereafter, the structural integrity reserve study is referred to as “SIRS.” Now we can turn our attention to the requirements of the SIRS as set out in §718.112 (f)(2)(a), Florida Statutes.

The Structural Integrity Reserve Study (required for all condominium and cooperative buildings three stories or higher regardless of date of certificate of occupancy):

An association must have a SIRS 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.

The SIRS 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.

As further set out in the legislation, 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.”

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 each reserve item.

If the condominium building is less than three stories, then the legislation provides that “in addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These accounts must include, but are not limited to, roof replacement, building painting, and pavement resurfacing, regardless of the amount of deferred maintenance expense or replacement cost, and any other item that has a deferred maintenance expense or replacement cost that exceeds $10,000.”

The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance.

If an association fails to complete a SIRS, such failure is a breach of an officer’s and director’s fiduciary relationship to the unit owners.

Non-Waivable and Waivable Reserves In The Unity Owner-Controlled Association

As to the SIRS, the legislation is patently clear that unit owners may not vote for no reserves or lesser reserves for items set forth in the SIRS report. There is ongoing debate among attorneys in regard to whether a condominium under three stories can waive or reduce reserves for any of the reserve items required to be in the SIRS that are included in the under- three-story condominium reserve—for example, roof and painting. (For those interested, examine lines 1029 to 1033 and 1050 to 1071 in SB 4-D.)

Mandatory Reserves In The Developer-Controlled Association

Before turnover of control of an association by a developer to unit owners other than a developer pursuant to §718.301, Florida Statutes, the developer-controlled association may not vote to waive the reserves or reduce the funding of the reserves. (Previously, a developer could fully waive all reserves for the first two years, meaning this is a monumental change.)

Pre-Turnover Developer Duty

Before a developer turns over control of an association to unit owners other than the developer, the developer must have a SIRS completed for each building on the condominium property that is three stories or higher in height.

III. Official Records

Official records of the condominium and cooperative association include structural integrity reserve studies, financial reports of the association or condominium, and a copy of the inspection reports and any other inspection report relating to a structural or life safety inspection of condominium or cooperative property.

In addition to the right to inspect and copy the declaration, bylaws, and rules, renters have the right to inspect the milestone inspection report and structural integrity reserve study inspection reports as well.

Structural integrity reserve studies must be maintained for at least 15 years after the study is completed. In addition, inspection reports and any other inspection report relating to a structural or life safety inspection of condominium property must be maintained for 15 years after receipt of such report.

IV. Association Websites

In addition to other positing requirements, the inspection reports described above and any other inspection report relating to a structural or life safety inspection of condominium property and the association’s most recent structural integrity reserve study must be posted to the website.

V. Jurisdiction of Division of Condominiums, Timeshares and Mobile Homes

Pre-turnover, the Division of Florida Condominiums, Timeshares, and Mobile Homes (Division) may enforce and ensure compliance with 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. 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, and the procedural completion of structural integrity reserve studies.

VI. New Reporting Requirements For All Condominium and Cooperative Associations

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 email, United States Postal Service, commercial delivery service, or hand delivery, at a physical address or email 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.

An association must provide an update in writing to the division if there are any changes to the information in the list within six months after the change.

VII. Applicable To All Sellers of Units

As a part of the sales process, the seller of a condominium or cooperative unit and developers must provide to potential purchasers a copy of the inspector-prepared summary of the milestone inspection report and a copy of the association’s most recent structural integrity reserve study or a statement that the association has not completed a structural integrity reserve study.

VIII. Glitches

As with any new legislation of such a substantial nature, there often follow in subsequent years what are referred to as “glitch bills” which help provide additional clarity, remove ambiguity, and fix unintended errors. Some observe are (i) the term “common areas” is used in the legislation when in fact the correct term is “common element;” (ii) clarity needs to be provided regarding whether reserve items that are required to be in SIRS, but show up in the under-three-story reserves, such as paint and paving, can be waived or reduced by the membership; and (iii) for those buildings that are within three miles of the coastline, additional clarity could be provided to provide better guidance as to how to perform the measurement.

 

SFPMA: You can find this article on our Florida Building Inspections