Owners of Condo Units in Florida may be forced to sell their Condos in the near Future (Milestone Inspections).

New legislation in Florida may disrupt the condo industry as we know it today. The new post-Surfside rules will force some owners to weigh the cost of needed repairs against the benefit of moving and selling. It could become an unpleasant choice for many South Florida condominium owners, ahead of a new state building inspection law driven by last year’s catastrophic collapse of the Champlain Towers South building in Surfside. By the time Florida’s updated condo safety law goes into effect in 2025, many owners may have decided that it’s too costly to stay in their decades-old, high-rise condominiums.

For tens of thousands of Florida condominium residents, the new law potentially means paying large payments to meet reserve accounts and probable special assessments to fund major structural repairs. The new rules stand to price many residents out of their buildings, particularly those people on fixed incomes, professional advisers say. Moreover, condo owners who lease their units to year-round residents are either lifting rents or putting their properties up for sale, according to real estate agents and consultants who advise associations. Some of the assessments that will be needed may exceed current HOA assessments.

Some of the requirements of the new Law are:

• At 30 years old, buildings three stories and higher must be inspected. Thereafter, inspections must be conducted every 10 years. If built before July 1, 1992, the first structural inspection must be performed before Dec. 31, 2024.
• Buildings less than three miles from the coast must be inspected at the 25-year mark and again every 10 years.
• Inspection reports must identify significant structural deterioration, whether it’s dangerous or unsafe, and whether it should be repaired. Copies of reports must be distributed to all condo unit owners.
• Condo boards must conduct reserve studies every 10 years to determine how much money owners must be assessed to cover future repairs. The studies are planning tools that analyze the health of an association’s finances and physical property as it prepares for major repairs and replacement projects.
• Boards are barred from waiving the reserve requirement or using reserve money for other purposes, a change from the current law.

For decades, members of many Florida condo associations have voted each year to waive setting aside money for reserves, the equivalent of a rainy-day fund covering large expensive repairs in their buildings. Waivers were previously permitted under state law as long as a majority of unit owners voted to approve them. Waivers are still permitted under the new law but are limited to components not related to structural integrity. Thus, funding waivers cannot be approved for projects such as the roof, load bearing walls, electrical systems, plumbing, windows and foundations, among other items.