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SOME OTHER NEW LAWS CONDOS MUST FOLLOW – PART ONE
By
Eric Glazer, Esq.
Published July 25, 2022
We all know by now the myriad of new safety laws condos that are
3 stories or more are required to follow. They include
mandatory fire sprinklers or an engineered life safety system
(for buildings 75 feet or higher only), a Phase One Milestone
Inspection after 30 years and every ten years thereafter (25
years if the building is on the coast), a likely Phase Two
Inspection which will result in required repairs to the
structure and of course structural integrity reserve studies
performed by an architect or engineer and the mandatory full
funding of reserve accounts.
There’s actually more to know.
OFFICIAL RECORDS TO INCLUDE AND BE POSTED ON THE ASSOCIATION’S
WEBSITE:
c. All audits, reviews, accounting statements,
structural integrity reserve studies, and financial
reports of the association or condominium. Structural
integrity reserve studies must be maintained for at least 15
years after the study is completed.
A copy of the inspection reports for the milestone inspections
and the structural integrity reserve studies and any other
inspection report relating to a structural or life safety
inspection of the condominium property. Such record must be
maintained by the association for 15 years after receipt of the
report.
NO LONGER IS THERE THE ABILITY
TO WAIVE RESERVES OR USE THEM FOR OTHER PURPOSES
It was always ridiculously easy to waive the funding of the
reserve account. All it took was a lousy majority of a quorum.
Those days are now over and reserve accounts must be fully
funded, like it or not.
The same rule finally applies to developers. Before turnover of
control of an association by a developer to unit owners other
than a developer under 718.301, the developer-controlled
association developer may not vote the voting interests
allocated to its units to waive the reserves or reduce the
funding of the reserves.
You can no longer vote to use reserves set aside for one
category to be used to repair another category. Effective
December 31, 2024, members of a unit-owner controlled
association may not vote to use reserve funds, or any interest
accruing thereon, that are reserved for items listed in
paragraph (g) for any other purpose other than their intended
purpose.
(g)
Structural integrity reserve study.
1.
An association must have a structural integrity reserve study
completed at least every 10 years after the condominium's
creation for each building on the condominium property that is
three stories or higher in height which includes, at a minimum,
a study of the following items as related to the structural
integrity and safety of the building:
a. Roof.
b.
Load-bearing walls or other primary structural members.
c. Floor.
d.
Foundation.
e.
Fireproofing and fire protection systems.
f. Plumbing.
g. Electrical
systems.
h.
Waterproofing and exterior painting.
i. Windows.
j. Any other
item that has a deferred maintenance expense or replacement cost
that exceeds $10,000 and the failure to replace or maintain such
item negatively affects the items listed in subparagraphs a.-i.,
as determined by the licensed engineer or architect performing
the visual inspection portion of the structural integrity
reserve study.
2.
Before a developer turns over control of an association to unit
owners other than the developer, the developer must have a
structural integrity reserve study completed for each building
on the condominium property that is three stories or higher in
height.
3.
Associations existing on or before July 1, 2022, which are
controlled by unit owners other than the developer, must have a
structural integrity reserve study completed by December 31,
2024, for each building on the condominium property that is
three stories or higher in height.
BREACH OF FIDUCIARY DUTY – THIS IS SCARY
4.
If an association fails to complete a structural integrity
reserve study pursuant to this paragraph, such failure is
a breach of an officer's and director's fiduciary relationship
to the unit owners under s. 718.111(1). If you’re an
officer or director, this new law should scare you to death. If
you fail to do the reserve study, you have automatically
breached your fiduciary duty. This could potentially result in
individual liability against a director should the failure to do
the reserve study result in collapse or injury.
(h)
Mandatory milestone inspections.—If an association is required
to have a milestone inspection performed pursuant to s. 553.899,
the association must arrange for the milestone inspection to be
performed and is responsible for ensuring compliance with the
requirements of s. 553.899. The association is responsible for
all costs associated with the inspection. If the officers or
directors of an association willfully and knowingly fail to have
a milestone inspection performed pursuant to s. 553.899, such
failure is a breach of the officers' and directors' fiduciary
relationship to the unit owners under s. 718.111(1)(a). Again,
If you’re an officer or director, this new law should scare you
to death. If you fail to do the milestone inspection, you have
automatically breached your fiduciary duty. This could
potentially result in individual liability against a director
should the failure to do the reserve study result in collapse or
injury.
Next week, we’ll discuss other new laws that you definitely need
to know.
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