TALLAHASSEE — In the end, legislators couldn’t face the prospect of forcing thousands of condominium owners across Florida to be subjected to massive fees for repairs of their aging buildings.
A late-session amendment to a condo reform bill by the Senate on Thursday included strict new inspections of aging condominium buildings but removed the requirements for condominiums to hold money in reserve to pay for repairs.
The House sponsor of the measure, Rep. Danny Perez, R-Miami, declared the change unacceptable, warning that it would not help avoid future tragedies like the collapse of Champlain Towers South in Surfside last June. He and the Senate sponsor, Sen. Jennifer Bradley, declared the effort dead for the session.
“We believe in the House that the bill we passed off the House floor was going to get us as close as ever to making sure that the incident that took place at Surfside never happened again,” said Perez. He said that while he was confident “that the Senate is in agreement with the fact that something has to be done, unfortunately, this couldn’t be the year that we do it.”
The assessment facing condo owners at Champlain Towers South for its 40-year recertification exceeded $15 million. After postponing major repairs and arguing over costs, owners were hit with massive special assessments.
Bradley, R-Fleming Island, said that Perez “has been a good-faith partner” but they couldn’t resolve their differences before the regular session was scheduled to end on Friday.
“While both sides worked diligently to create a product to address the Surfside tragedy, unfortunately, agreement could not be reached on all issues,” Bradley said Friday, adding that she looks forward to working on the issue next year.
The Legislature’s failure leaves the state’s uneven condominium inspections laws in place. Real estate experts say that insurance companies and financial institutions will now impose reserve requirements on buildings, stepping in where state officials have been absent.
2 million people live in condos older than 30 years
There are an estimated 2 million people living in more than 912,000 condominium units that are 30 years old or older. Of the 1.5 million condo units in Florida, another 131,773 are 20 to 30 years old, and more than 105,000 condo units are more than 50 years old.
But under current law, only Miami-Dade and Broward counties and some individual cities require regular inspections of condos to ascertain their structural integrity. The proposed legislation would have attempted to change that.
SB 1702, sponsored by Bradley, and SB 7042 by the Senate Regulated Industries Committee, and HB 7069 by Perez and the House Pandemics and Public Emergencies Committee, both incorporated recommendations for more frequent building inspections, as outlined by the Surfside Working Group’s Florida Building Professionals Recommendations.
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The proposals not only imposed increased financial and inspection requirements but made the information a public record to allow new home buyers, existing homeowners and public officials to keep the condo associations accountable.
“We hope to encourage condominium associations to be intentional in repairs and stave off structural issues, take care of maintenance and make sure unit owners are aware of the condition of the building and the state of reserves,’’ Bradley said earlier this week.
But they couldn’t resolve how to address the most thorny issue for most condominium associations: How to get condo owners to pay for repairs when they are identified by inspectors. Current law allows condominium associations’ boards to waive the requirement that they hold money in reserve for building repairs and state regulators do not keep track of which ones have reserves and which do not.
While the House want to end the waiver, the Senate was reluctant to go that far.
“The goal would be to put them on a good course of financial health, not to shock the system,’’ Bradley said.
On Thursday, Bradley stripped all provisions relating to reserve requirements from her bill, and the Senate passed it 38-0.
Sen. Gary Farmer, a Lighthouse Point Democrat, said later he changed his vote to no. He said the state should be creating risk pools to alleviate the financial hit to condominium associations in financially constrained communities.
“There are sensible approaches we could take,’’ he said. “Clearly, the condos are not in a financial position to bear the brunt of something like this. I’ve got older condos in Fort Lauderdale, Hollywood and Pompano Beach who are income constrained and income limited, and they paid off the condo long ago. So they’re limited in their income and they can’t afford a big assessment.”
Sen. Jeff Brandes, R-St. Petersburg, said the House bill went too far, because it risked bankrupting “60- and 70-year-olds, in condos, to come up with a $10 million reserve requirement.”
He said he was confident that the insurance and mortgage companies are going to require inspections going forward.
“I have faith that even if the Legislature did nothing this year on that issue, the insurance industry as a whole is going to require enough inspections to ensure that the condos are safe,’’ Brandes said.
Engineer asks legislators not to give up
Allen Douglas, executive director of the Florida Engineering Society and American Council of Engineering Companies of Florida, urged legislators not to give up yet. Lawmakers have extended the session until Monday to complete the budget.
“The tragic collapse at Surfside is solid proof that Florida desperately needs to update and strengthen its building safety regulations,’’ he said.
He cited a poll by Mason-Dixon research that found that 85 percent of all voters surveyed said they support “requiring periodic inspections of all multi-family residential units in Florida.”
“Lawmakers still have time to address this important issue, which would be of great comfort to the nearly 2 million people living in condo units that are 30 years or older,’’ Douglas said.
Under the House proposal, condominium associations would be required to conduct reserve studies every decade to make sure they have the resources to finance needed structural improvements. They also would be barred from waiving a requirement that they put money in reserve to make structural improvements, although they could continue to waive collecting reserve funds for other improvements.
The bill also required that condos would have to be recertified after 30 years if they are three stories or higher, or are 25 years old and within 3 miles of the coast. Every 10 years after that, they must be recertified again.
Under the Senate bill, if a condo is within 3 miles of coastline and was 20 years old by July 1, 2022, it will have to undergo a “milestone” inspection by a Florida-licensed architect or engineer to determine the adequacy of the structural components of the building in an attempt to determine the general safety of the building. A similar inspection was required every seven years thereafter. For all other condos, the inspection must occur by January 2025 if a building’s certificate of occupancy was issued on or before July 1, 1992, and every 10 years thereafter.
The Community Associations Institute, which represents condominium associations, estimates there are 9.6 million Floridians living in buildings with 48,500 community associations. As many as 20,000 condominium buildings would have been impacted by the proposed legislation, and many owners or residents of those buildings may be unaware of building conditions that require immediate attention, the organization said in a news release.
Passing legislation aimed at increasing condominium safety was the organization’s top priority, the group said. “Our advocates will continue [those] efforts and support sensible laws.”
Perez said the issue remains a priority for lawmakers. “We’ll be back next year,’’ he said.
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