The Honest Broker: New Condo Rule: S-4D
BY: DIANE LOTT, BROKER PARADISE FOUND REALTY, INC
Do you live in a Condo with 3 floors or more? On May 26th, Governor DeSantis signed into law Senate Bill 4-D. It passed during special legislative session and is effective immediately. This Bill is a response to the Surfside collapse last year. The Bill established a statewide structural inspection program, requiring Condominium and Cooperative Associations to conduct Milestone Structural Inspections of their buildings and to perform Structural Integrity Reserve Studies to ensure that buildings are safe for continued use. The Bill was designed to ensure proper inspections and requirements be performed at specific times in the building’s existence.
First, the Milestone Structural Inspection, which is a structural inspection of a building conducted for the purposes of determining a buildings’ life safety and structural component integrity or adequacy. This inspection must be performed by a licensed engineer or licensed architect. An Association is required to perform a Milestone Structural Inspection for each building within its community that is three (3) or more stories high. A milestone inspection will be required if the building’s certificate of occupancy was issued on or before 7/1/1992 and requires the inspection to be performed by December 31, 2024, and then every 10 years thereafter. For Condominiums located within three (3) miles of the coastline, each building within the community that is three (3) or more stories high, must be inspected by December 31 of the year in which the building turns twenty-five (25) years old, and then subsequently every ten (10) years thereafter.
The Association is responsible for all costs associated with performing a Milestone Structural Inspection and can be upwards of approximately $30,000. The Milestone Structural Inspection Report is an official record of the Association and must be maintained by the Association for 15 years. A Tenant of a Unit has a right to inspect an Association’s Milestone Structural Inspection Report, and a prospective purchaser of a Unit has a right to inspect an Association’s Summary of the Report. It is a breach of an Officer or Director’s fiduciary duties if an Officer or Director willfully and knowingly fails to have a Milestone Structural Inspection performed, when necessary.
In addition, part of the law requires a Structural Integrity Reserve Study and is a study of an Association’s reserve funds which are designated for future major repairs and replacements of the Common Areas. The Structural Integrity Reserve Study must consist of a visual inspection of the Common Areas by a licensed engineer or licensed architect and has several required components identified in the new bill. An Association must have a Structural Integrity Reserve Study completed every ten (10) years, with the initial Structural Integrity Reserve Study by December 31, 2024. As of December 31, 2024, an Association may no longer refuse to fund (may not waive) or underfund the reserves for items required to be included in a Structural Integrity Reserve Study. Furthermore, as of December 31, 2024, for items required to be included in a Structural Integrity Reserve Study, an Association may no longer use those itemized reserve funds (or any interest accruing thereon) for other purposes, and an Association may only use those itemized reserve funds for their designated purposes.
A Structural Integrity Reserve Study is an official record of the Association and must be maintained by the Association for 15 years. A prospective purchaser of a Unit has the right to inspect an Association’s most recent Structural Integrity Reserve Study. If an Association has not completed a Structural Integrity Reserve Study, the prospective purchaser of a Unit is entitled to a statement stating that the Association has not completed the Study. It is a breach of an Officer or Director’s fiduciary duty if the Association fails to complete a Structural Integrity Reserve Study, as necessary.
Finally, each Association must provide certain information about its buildings to the Division of Florida Condominiums, Timeshares, and Mobile Homes on or before January 1, 2023.
How will this affect the residents’ costs? The inspections and Reserves will be reevaluated and adjusted to ensure that the association has adequate funding for repairs and maintenance of their communities and buildings. If the association has “waived” or underfunded their reserves, then the costs will be exponential to “catch up” with the need to fund at 100%.
Diane Lott, Broker
Owner: Paradise Found Realty
Paradise Found Realty, Inc. of Palm City
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