‘Be Proactive With Clients’: Florida’s New Condo Regulations Will Require a Closer Look at Contracts

Florida has new recertification requirements for condos over three stories after Gov. Ron DeSantis signed the legislation into law as a response to the Champlain Towers South collapse in Surfside. 

Although the new legislation is thought by many to be a step in the right direction to prevent another tragedy, some in the legal and real estate communities point out new issues that could arise and what can be done to help solve some of the problems. 

Recertification is now required after 30 years, or if a building is within three miles of the coast, it’s required after 25 years. Recertification is then required every 10 years after that.

Real estate attorney Peggy Rolando of Shutts & Bowen in Miami explained that a phase one inspection must be done on all condominiums and co-ops in Florida.

“Phase one is a visual inspection done by a licensed Florida architect or structural engineer. What the professional is doing is visually inspecting the building to determine if there are signs of structural deterioration. They’re not looking for cosmetic issues,” said Rolando. “If there are signs, then the association needs to have a phase two inspection done. Phase two involves destructive or non-destructive testing to see if there are any issues.” 

Rolando said the reports will need to be distributed to unit owners so that it becomes an official record of the association, and also sent to the local government and potential unit buyers.

“The legislation doesn’t say what the local government needs to do with it, but it’s basically putting the onus on the association to disclose the condition of the building and act on the professional recommendations,” said Rolando.

The changes will create a larger demand for licensed Florida architects and structural engineers, which Rolando said will be hard to fulfill amid the current construction boom.

“I think it’s important for associations to already get their design professionals lined up to conduct this structural integrity inspection,” she said. 

Some of the new provisions won’t take effect until the end of 2024, but Rolando said finding the professionals now while there’s time will be beneficial, as many will need to make repairs around the same period.

‘Florida Is so Litigious’

Various issues within associations could arise, so Rolando suggested associations also plan ahead and have a condo attorney in mind. 

“Florida is so litigious it’s kind of unavoidable, but I think there are possibilities when associations do not undertake the inspections the statues mandate,” said Rolando.

Erin Sykes, Chief Economist and Real Estate Wealth Advisor at Nest Seekers International. Courtesy photo Erin Sykes, chief economist and real estate wealth adviser at Nest Seekers International.

Erin Sykes is chief economist at Nest Seekers International and represents clients in Palm Beach, Miami, Hamptons and New York. She said it’s important to be proactive with clients, especially when it comes to reviewing policies and contracts.

The statute also requires that by Dec. 31, 2024, all condo associations have a structural integrity reserve fund.

Rolando said many associations have been waiving reserves for years because costs have often been too high, but now they will reflect the true cost of homeownership in an already expensive market.

“There’s a significant deficient that needs to be made up,” said Rolando. “This is going to be a very significant cost to the unit owners.” 

Many Condo Owners to Be Priced Out

Condo living, in general, is about to be a lot more expensive, according to Sykes, who said many will be priced out. 

“Those additional costs to homeowners are going to really drive some people out because they’re not going to be able to afford it, even though it’s the right thing to do,” said Sykes. “I think the demand on its own is going to soften on these buildings because of the additional costs.”

Sykes said there’s a lot of interest in older condos because of their price, but when potential buyers walk into the space, often there’s obvious mold or deterioration.

In a recent tweet, Sykes said, “This is why I won’t touch a pre-2000 FL condo … too much liability for my buyers and for me. Thankful we will finally have #condoreform #reinspections to prevent another tragedy. FL condo buyers; I recommend you ONLY consider condos built post-2000.”

As a result, homeowners might switch to renting to avoid the extra expenses older condos demand, and Sykes expects rental demand to rise even higher. 

“Because of legislation and plus the elevated prices, this plays into that same situation where if people can’t afford to maintain their homes or to buy their homes anymore, it’s going to push more people towards renting,” Sykes said.

As Florida awaits a decision on roofing legislation, adjusting to the new laws will be a learning curve, the way Sykes sees it. 

“Once we have certain challenges put in front of us with these structural checks with these enhanced reserves, we’ll undoubtedly see more problems arise but this is a great first step,” said Sykes.



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