MIAMI — Florida condominium owners should expect greater expenses from their associations in the coming year as a result of a safety rule passed by state lawmakers in 2022.
It requires organizations to maintain sufficient reserves to pay for major repairs and to complete a reserve survey every ten years. According to state statistics, older condos, primarily in South Florida, may face significant hikes in association payments to support reserves and repair costs as a result of the law.
Gov. Ron DeSantis signed the legislation in reaction to the partial collapse of Champlain Towers South, which killed 98 people in Surfside in June 2021. New laws compel condo associations in buildings with three or more stories to submit an inspection report focusing on structure, upkeep, and estimated repair or renovation expenses by December 31.
The research only addresses a small portion of the larger issue of Florida’s condo and property insurance crisis. According to a May study from the Florida Office of Insurance Regulation, the average homeowner’s insurance premium is over $3,600, which is roughly $1,000 higher than the national average, according to the National Association of Realtors.
Kelli Roiter, a condo owner in Hallandale Beach, sympathizes with residents who are struggling to afford the higher fees, but she says she supports legislation requiring associations to maintain repair reserves if it means her oceanfront building, which was built in 1971, receives the repairs it need.
She claims that her building, located a few miles away from Champlain Towers South, is exhibiting some of the same issues that existed prior to the building’s collapse.
“I’m concerned that this building will collapse,” Roiter stated. “Some nights, I wake up to a creak and jump. And then I remind myself that we are secure. But, am I safe?
Rick Madan, president of the Biscayne Neighborhoods Association, which represents 22 condo organizations, claims that the rule is causing problems for condo owners by requiring buildings to provide full coverage and proposing a blanket solution that does not handle the matter holistically.
According to Madan, the rule requires newer condos to have reserve funds, inspection reports, and recertifications just like older structures, at the expense of condo owners.
This is especially difficult for folks who retired in South Florida on fixed incomes, Madan added.
“You are having us perform all these reserve studies. “You’re forcing us to increase our reserves, so we have to come up with more money,” Madan said of the Florida Legislature. “On top of that, you’re not giving us any flexibility on the insurance side where the insurance companies are basically making so much profit because they write a policy for $100 million, which they know they’ll never have to pay a claim on.”
Democratic state senator Jason Pizzo, who represented Surfside at the time of the collapse, agreed with Madan’s statement concerning property insurance.
Pizzo and Republican state Sen. Jennifer Bradley held a condo summit in early December, during which he cautioned associations to be transparent about the required projects for repair expenses to minimize structural damage.
Pizzo told The Associated Press that it is critical for associations to maintain transparency with condo owners to ensure that rising payments are actually related to repairs and not to amenity expenditures, and that they are completed within a reasonable timeline to protect residents.
He said it’s fair to be concerned about future costs, which is why impartial examinations of older structures are required.
Nearly 90% of Florida’s 1.6 million condos are more than 30 years old, and Pizzo expressed concern that many have not received critical inspections.
“They’re going to get a milestone inspection, and they may find some immediate repair or replacement requirements as a result of it,” Pizzo told me. “That is not truly by operation of law. That is the action of common sense.”
According to Luis Konski, a Miami attorney who specializes in construction and commercial tort lawsuits, old condo regulations kept prices low by failing to conserve money for future repairs, and owners were subsequently smacked with special assessments when repairs were required. According to Konski, this pushed numerous associations to overlook critical but expensive maintenance, which most certainly contributed to the Surfside building disaster.
He said he’s not sure if the state has enough people to ensure associations obey the new requirements. Pizzo expressed similar concerns, stating that the state’s Department of Business and Professional Regulation may need legislative changes to begin reviewing structural integrity and inspection reports while continuing to regulate all aspects of business in Florida, including licensing and enforcing rules.