More than a year after the Surfside tragedy, Florida passed a new condo safety law (SB 4-D Building Safety) that aims to prevent such a tragedy from recurring. For a condo association, one of the biggest concerns with this latest reform is the new reserve funding requirement that ensures there’s enough money on hand to make any necessary safety repairs.
Though it’s too soon to predict how the latest legislative changes will affect association fees, it’s not too early to think about what your condo association can do to help its homeowners prepare for the changes that lie ahead.
How Will Florida’s New Condo Safety Law Affect Your Condo Association?
The Surfside building collapse brought to the forefront a danger many Floridian condo owners face: building corrosion. Before the Surfside tragedy, most Florida counties did not technically require condo buildings in the state to be inspected by licensed engineers or architects once they were built and occupied. The new law requires an inspection once your building turns 25 or 30 years old, depending on how near it is to the coast. After that, you must schedule inspections every ten years.
But a more significant—and potentially much more expensive—change brought about by SB 4-D is one many condo associations aren’t prepared for: sufficient reserves to fund all repairs needed to maintain the structural integrity of any condo building three stories or higher.
Of great concern for many existing condo associations is that they must complete a structural integrity reserve study and prove they can meet this funding requirement before 2025. And to figure out how much they need to put aside, condo boards are requested to hire outside consultants to perform these reserve studies, analyzing the association’s finances and potential repair costs. The problem, however, is that many companies don’t yet offer those types of analyses.
Experts agree that SB 4-D is a much-needed process, but they also acknowledge it will be a massive shock for many associations. Some, they fear, might be unable or unwilling to comply with the new law.
Is Your Association Prepared to Pay for Building Repairs?
Prior to SB 4-D, Florida condo associations were permitted to vote to waive reserves, meaning they didn’t have to reserve any funds at all. Instead, they’ve relied on special assessments to pay for repairs whenever they arose. For instance, if a roof needed to be replaced, the cost would be evenly split amongst the unit owners, some of whom would then have to dip into savings or take out a loan to cover the expense. Now those funds must be immediately available.
That means condo boards and residents should begin taking action now by:
- Locating an engineering firm to give them a priority list of necessary repairs.
- Looking at funding options, including loans.
- Talking to homeowners who face having to sell their condos because they can’t afford to contribute to the reserve.
The hope is that the inspections required by SB 4-D will pick up any potential building problems long before they lead to a catastrophe like Surfside. The sooner your condo association takes steps to conduct a structural integrity reserve study, the sooner it can begin to put the funds in place to meet future repair costs.
