Article
Courtesy of
By Kevin Koushel
Published June 14, 2023
On June 9, 2023, Governor DeSantis signed Senate Bill 154
(“SB 154”) into law. This was the highly anticipated “glitch bill” to
address technical issues with Senate Bill 4-D (“SB 4-D”) - last year’s
controversial legislation in response to the collapse of Champlain Towers
South. While SB 154 improves upon its predecessor in some respects, it
leaves in place the substantive changes to Chapter 718 that, for many, will
make condominium ownership more expensive. These changes are the milestone
inspections, structural integrity reserve studies (“SIRS”), and increased
reserve requirements.
The concept of a milestone inspection is that once a condominium reaches a
certain age, the association is required to visually inspect all buildings,
three stories or more, for substantial structural deterioration. If any is
detected, the association must perform testing and/or repairs. SB-4D set the
initial deadline for milestone inspections as December 31, 2024, or by the
end of the year in which the condominium turns 25 or 30 years old, depending
on its vicinity to the coastline. According to some reports, this instantly
triggered the inspection requirement for over 20,000 condominiums across the
state.
Compliance by December 31, 2024, however, was unrealistic or impossible
under SB 4-D. For example, milestone inspections had to be performed
directly by a limited pool of licensed architects or engineers. In addition,
the 25-year deadline for certain coastal condominiums had already passed, or
the method of computation caused the inspection outside date to be sooner
than the end of 2024. SB 4-D also permitted local enforcement agencies to
send compliance notices, but it was unclear whether the notices would
effectively shorten or extend the statutory deadlines. To say the least,
there were numerous concerns with the feasibility and implementation of the
milestone inspection requirements.
SB 154 attempted to address these concerns. First, milestone inspections can
now be performed by a “team of professionals” working under a licensed
architect or engineer. This was intended to increase the available manpower
to perform milestone inspections. Next, the initial deadline for
condominiums reaching 30 years old between July 1, 2022 and December 31,
2024, was extended to December 31, 2025. This addressed the deadlines that
had already passed, or those with outside dates sooner than December 31,
2024. SB 154 also removed the strict 25-year deadline for coastal
condominiums, and instead, authorized local enforcement agencies to impose a
25-year deadline for any applicable condominium because of local
circumstances, such as the proximity to saltwater. In addition, SB 154
revised the notice procedure for local enforcement agencies, which can now
extend the milestone inspection deadline for a condominium that shows good
cause (e.g., a pending contract for a milestone inspection that cannot be
reasonably completed by the deadline).
The second substantive change is the SIRS. Like the milestone inspection,
the SIRS involves a visual examination of certain building components deemed
critical to structural soundness and safety. Its purpose is to determine an
annual reserve amount that achieves the estimated replacement or deferred
maintenance cost for the components, by the end of their useful lives.
Condominiums must then incorporate those amounts into their annual budgets,
meaning associations can no longer waive reserves for the specific SIRS
components. SB 4-D also set the initial SIRS deadline as December 31, 2024,
for condominium associations existing on or before July 1, 2022.
A major concern with SB 4-D was that the SIRS components included
load-bearing walls, floors, and foundations. Performing a visual inspection
of these items, however, may be difficult or practically impossible without
significant destructive work. The original list of SIRS components also
included windows, but condominium associations typically only maintain
windows if they are included as common elements (i.e., not windows deemed
part of the units). Additionally, SB 4-D was unclear as to when annual
budgets must start including reserves for SIRS components despite the
initial deadline to have a SIRS report completed. Again, there were also
numerous concerns with the feasibility and implementation of the SIRS.
SB 154 attempted to address these as well. For example, floors and
foundations were removed from the list of SIRS components, and “load-bearing
walls” was replaced with: “structure, including load-bearing walls . . . and
primary structural systems as those terms are defined in s.627.706.” In
addition, windows are now accompanied by “exterior doors,” along with
clarification that the SIRS requirement only applies to components
maintained by the association. SB 154 also authorized those performing the
SIRS to determine that no reserves are required for certain components with
an estimated useful life greater than 25 years - or the SIRS may recommend a
deferred maintenance expense for such components. Either way, this was
intended to address “structure” or any other SIRS component that may be
difficult or impossible to inspect. Finally, the mandatory reserve
requirement was clarified to apply to any budget adopted on or after
December 31, 2024, meaning one adopted beforehand is the last time a unit
owner-controlled condominium association can provide no reserves or less
reserves than required by the SIRS.
It is important to note that there are many additional aspects to SB 4-D
that continue to remain in place. Furthermore, SB 154 includes new
provisions that were not originally part of SB 4-D. It will thus take some
time to reconcile both bills to understand the full impact on condominiums
going forward. But the general takeaway from this “glitch bill” is that
milestone inspections, SIRS, and increased reserve requirements are here to
stay.
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