As 2024 draws to a close, nearly a million Florida condo owners face a significant deadline. A law passed in 2022 requires most condo associations in the state to submit building inspection reports and collect funds from owners to cover the cost of any necessary repairs. However, these new requirements have sparked controversy, with many owners expressing frustration over rising fees and additional assessments. News outlets have reported on the financial strain these regulations are causing, particularly among elderly residents and those on fixed incomes. While the emotional response is understandable, it’s crucial to clarify what these laws aim to achieve.
Understanding the Purpose of the Laws
The laws in question, SB-4D (2022) and SB-154 (2023), require Florida condo associations to meet three main obligations: conduct licensed inspections, ensure transparency in reporting, and establish reserve funds for repairs. It’s important to note that these are not tax laws designed to directly increase housing costs for condo owners. Instead, they are designed to ensure that condo buildings—particularly those located near the coast—are structurally sound and that owners contribute fairly to necessary repairs.
Building Inspections and the Milestone Requirement
The laws stipulate that all condos built before 1992 must undergo a milestone inspection by December 31, 2024. These inspections, which must be conducted by licensed architects or engineers, assess the structural integrity of buildings. Condos that are 25 years or older and located within three miles of the coast are also subject to this requirement. If the inspection uncovers any potential structural issues, additional tests are mandated to determine the need for repairs. If repairs are deemed necessary, owners must fund them. The law does not allow for waiving these costs through a vote.
Previously, milestone inspections were only required in Miami-Dade and Broward counties. Now, they are mandatory across the state, and the results must be reported to local authorities, shared with all unit owners, and made available to potential buyers. For many, the increased transparency is a significant shift.
Funding for Repairs and Reserves
Another key component of the new laws is the requirement for condo associations to set aside sufficient reserves for long-term building maintenance, including repairs for items subject to wear and tear, such as roofs, balconies, and elevators. In Florida, many condo associations have struggled to save adequately for these types of repairs.
The tragic collapse of the Champlain Towers South condominium in Surfside, which killed 98 people in 2021, highlighted the dangers of underfunded associations. Before the collapse, a reserve study recommended the condo association set aside over $10 million for repairs, but the association had only $706,000 in reserves—less than 7% of the necessary funds.
The True Costs of Coastal Living
More than 16,000 condo associations in Florida, representing around 900,000 of the state’s 1.5 million condominium units, are impacted by the new regulations. Many of these buildings are over 30 years old and have significant maintenance needs. For well-maintained properties with adequate reserves, the new laws mainly involve enhanced transparency and a continued commitment to reserve funding.
However, for some owners, particularly retirees on fixed incomes, the financial burden of these new requirements is substantial. To address this, Governor Ron DeSantis has indicated that some relief may be offered to condo owners facing significant financial hardship as a result of these regulations.
Balancing Frustration with the Intent of the Laws
It’s understandable that many condo owners are frustrated by the sudden need to fund both past maintenance shortfalls and future repairs. However, the new laws aim to address the true cost of living in a coastal condo and ensure that properties are properly maintained for residents’ safety. Lawmakers are simply pushing condo associations to adopt practices they should have put in place years ago.
While some owners may feel overwhelmed by the financial requirements, it’s important to separate the intent of these laws from the possible overreaction or mismanagement by some condo associations. In 2024, Florida passed House Bill 1021 to improve association governance and oversight, which should help manage concerns over potential fraud or poor management of funds.
Ultimately, the new regulations are designed to make the true cost of living in oceanfront condos more transparent. The state is taking steps to ensure that condo owners are not left in the dark about the financial needs of their buildings, with the aim of preventing safety hazards and financial crises in the future.
Bill Hughes, Research Director at the Kelley A. Bergstrom Real Estate Center at the University of Florida, emphasizes that the laws are necessary to protect residents’ safety and ensure the long-term viability of these structures, especially in Florida’s coastal regions.
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