Four years after the collapse of Champlain Towers South that killed 98 people in the quiet city of Surfside, Florida, Gov. Ron DeSantis signed into law the state’s latest condominium safety legislation, offering some relief to cash-strapped owners and condo associations.
“We’ve heard the concerns of condo owners throughout Florida, and we are delivering reforms that will provide financial relief and flexibility, strengthen oversight for condo associations, and empower unit owners,” said DeSantis in a prepared statement after signing House Bill 913 and House Bill 393 on June 23.
The two laws attempt to provide relief to condo owners and associations facing steep maintenance bills after safety legislation was passed in the wake of the third-deadliest building collapse in the country’s history.
The original legislation, enacted in 2022, was the first statewide safety legislation concerning condominiums. The law required condominiums above three stories to perform Structural Integrity Reserve Studies — a comprehensive evaluation of a building’s structural components and estimated repair costs. The original law also removed the ability of condominium associations to waive keeping reserves, the money used to conduct building maintenance and repairs.
“All of a sudden, people that have lived in these buildings for years and years and years were being faced with huge financial pressures as a result of assessments and special assessments … to comply with the reserve requirements and the mandate to make certain structural repairs,” said Jeffrey Margolis, a partner at Fort Lauderdale-based law firm Berger Singerman, in an interview. Margolis has nearly 30 years of legal experience and regularly works with developers engaged in the redevelopment of condominiums.
The bigger of the two bills, House Bill 913, postpones the already-passed deadline for condominiums to complete a SIRS to Dec. 31. Associations were also given the ability to pause reserve fund contributions for two years to help prioritize the most critical repairs needed. The law also raises the cost threshold for required maintenance on building components from $10,000 to $25,000.
Associations can take out loans
Condo owners and associations have also been given the green light to open a line of credit or finance their reserve funds by taking out a loan. “If you hadn't been collecting reserves, you needed to catch up immediately,” said Margolis, and while taking out a loan had not been explicitly prohibited, “there was nothing in the law” beforehand, he added.
Previously, the cost of studies and building repairs can reach into the millions of dollars and have led to a 45% increase in condo association fees since 2021 for buildings in Miami-Dade and Broward counties alone, according to an analysis by the Miami Association of Realtors published in February.
Further complicating the issue is that the most affected buildings are older, located along coastal areas, with “a good percentage” of owners being retirees on fixed income, said Margolis. That means that while condominiums were supposed to complete their SIRS by 2024, many hadn’t.
Then there's House Bill 393. The law provides updates to the My Safe Florida Condo pilot program that launched last year to help fund hurricane safety improvements for condominiums. The changes include limiting grant funding to improvements “that will result in a mitigation credit, discount, or other rate differential” for the improved building, according to the governor’s statement.
The law also lowers the formerly 100% approval requirements down to only 75% in the damaged structure, prohibits condominiums that have failed to conduct the necessary SIRS and inspection requirements from applying for grants, and restricts eligibility to buildings above three floors with at least two residences.
The legislation may help “ease the tension of unit owners having to pay immediately to fund all the reserve requirements,” Margolis said, but it would still take years for the dust to settle. “I think it will provide some, but I don't think that it's going to provide relief for many of the older buildings that we have. It's a start, but it's not going to solve the problem,” he said.