Here are some common questions about the newly instituted Florida Milestone Inspections:
1. What is a Milestone Inspection?
a. Florida has now imposed a state-wide structural inspection program for condominium and cooperative associations three (3) stories or more in height, defined as a “milestone inspection.”
2. Who is responsible for complying?
a. Community association managers or management companies contractually hired by a condominium association subject to this inspection must comply with this section as directed by the board.
3. Are milestone inspections required for all buildings in Florida three (3) stories or more in height?
a. Milestone inspections must be performed by December 31 of the year the building reaches 30 years in age, based on the issue date of the building’s certificate of occupancy, and every ten years after that.
b. Buildings within 3 miles of the coastline must perform a milestone inspection by December 31 of the year they reach 25 years in age and every ten years after that.
4. When has the State required the milestone inspections to begin?
a. Buildings with a certificate of occupancy issued on or before July 1, 1992, must have the initial milestone inspection performed before December 31, 2024.
b. All others follow the year based on the issue date of the building’s certificate of occupancy mentioned in question 3.
5. Who is responsible for the cost of the milestone inspection?
a. Condominium and cooperative associations are responsible for the scheduling and costs associated with the milestone inspection.
6. What type of inspection takes place in the milestone inspection?
a. Milestone inspection means a structural inspection of a building’s primary structural systems.
7. Who can perform the milestone inspection?
a. Milestone inspections must be performed by a Florida licensed engineer/architect who must attest to the life safety and adequacy of structural components of the building.
8. What should be determined in the milestone inspection?
a. To the extent that it’s reasonably possible, the inspection must determine the general structural condition of the building as it affects the safety of the building, such as necessary maintenance, repairs, and replacements of structural components.
b. “Substantial structural deterioration” is described as substantial structural distress that negatively affects the building’s general structural condition and integrity.
9. How many phases does a milestone inspection consist of?
a. Milestone inspections will consist of two (2) phases.
10. What is Phase 1 of the Milestone Inspection?
a. A visual examination of habitable and non-habitable areas of a building. If no signs of structural deterioration are found, phase two is not required.
11. What is Phase 2 of the Milestone Inspection?
a. If substantial deterioration is found during phase one, phase two may involve destructive or non-destructive testing at the inspector’s discretion. This additional inspection may be as extensive or limited as necessary to fully assess areas of distress.
12. What should the building owners do once the milestone inspection report is completed?
a. Architect/engineer who performed inspections must submit a sealed copy of the inspection report and findings to the association and appropriate local building official.
13. Will an association be advised when a milestone inspection should occur?
a. Local enforcement agencies will provide buildings required to comply with this law notice of required inspection by certified mail.
14. Once notice is received, how long does a building have to comply?
a. Upon receiving notice, condominium/cooperative associations will have 180 days to complete phase one of the inspection.
15. Who is responsible if an inspection was not performed and repairs were not made?
a. Associations that fail to complete the mandatory Milestone Inspection will breach the officers’ and directors’ fiduciary relationship to the unit owners.
Here are some common questions about the newly instituted Florida Structural Integrity Reserve Studies:
1. Who must complete a Structural Integrity Reserve Study?
a. Must be completed for buildings three (3) stories or higher in height every ten years and completed by December 31, 2024, for associations existing on or before July 1, 2022, which unit owners control.
2. Are developers required to perform this study?
a. Developers must perform this study before turning the association over to unit owners.
3. Who can perform the reserve study?
a. May be performed by any person qualified to perform such study. However, the visual inspection portion of the study must be performed by a licensed engineer/architect.
4. What should the Structural Reserve Study Include?
a. Must identify the common areas being visually inspected, state the remaining expected useful life and replacement costs, and provide a recommended annual reserve amount that achieves the replacement or deferred maintenance costs of elements being visually inspected by the end of remaining useful life.
b. Regarding reserves, the amount reserved for an item will be determined by the most recent structural integrity reserve study.
5. Can an Association waive Reserves?
a. Effective December 31, 2024, members may not vote to waive reserves, provide less reserves, or use reserves for any purpose other than their intended purpose for the following items:
i. Roof
ii. Load-bearing walls or other primary structural members
iii. Floor
iv. Foundation
v. Fireproofing and fire protection systems
vi. Plumbing
vii. Electrical systems
viii. Waterproofing and exterior painting
ix. Windows
x. Any other items requiring replacement/repair costs that exceed $10,000 and the failure to replace or maintain the item negatively affects the above items as determined by a licensed engineer/architect
6. Will a Developer be able to Waive Reserves?
a. Developer-controlled associations may not vote to waive reserves or reduce funding of the reserves.
7. Who could get in trouble if reserves are not collected?
a. Associations that fail to complete a structural reserve study will breach the officers’ and directors’ fiduciary relationship to the unit owners.
8. Who can receive and review the study?
a. A copy of this study is considered an official record, is open to inspection by association members/authorized representatives, and must be kept by the association for 15 years.
We recently held an educational “Condo Inspection & Insurance Legislation Webinar: Discussion about SB 4D and SB 2D” webinar featuring Michael Bender from Kaye Bender Rembaum and Paul Mack from Assured Partners of Florida to discuss the impact of SB 4D and SB 2D on community associations.
Imagine: the association has just informed you it is set to begin a massive concrete restoration project. As part of the project, the contractor will need access to the rebar beneath the concrete slab connected to (or in legalese, “appurtenant to”) your unit’s balcony. To access the balcony slab, the contractor will have to remove the custom Italian tiles you just installed on your balcony. Who is responsible for the costs of the removal? Who is responsible to replace the tiles? The answers to these questions will largely depend on whether the governing documents of the association include an “incidental damage clause” and the specific circumstances of the situation, too.
In its most simplistic sense, an incidental damage clause in the declaration means that the association is responsible to repair any “incidental damage” caused by the association’s exercise of its maintenance, repair, and/or replacement responsibility. However, the existence or absence of such language is not always dispositive as to the repair responsibility. This is similar to “i” before “e” unless after “c” as there always seem to be exceptions.
For example, the repair and replacement obligation of the association may be limited only to damage caused to the unit and not cover any owner improvements to limited common elements, such as the balcony; or the obligation may be limited to damage to improvements only as originally installed by the developer, too. Whether the association or the owner will be responsible to repair the damage is highly fact-specific and will depend on the exact language in the governing documents of the association. Arbitration decisions of the Division of Florida Condominiums, Timeshares, and Mobile Homes (the Division), discussed below, provide some guidance as to when the association may be responsible for incidental damage and when the owners will be responsible to repair same. That said, bear in mind that such decisions are not precedential and in addition only apply to the parties in the arbitration that resulted in the Division’s order. However, it does provide a good understanding of how the Division may rule in a similar circumstance.
As discussed above, where the governing documents contain incidental damage language, and the association damages a portion of the unit while conducting its maintenance, repair, and replacement responsibility, the association is likely responsible for the repair. This is illustrated in Rock v. Point East Three Condominium Corporation, Inc., Arb. Case No. 99-0220, Final Order (September 29, 2000).
In Rock, the association removed a shelf located under a sink and several wall tiles in order to repair rough plumbing in the common elements. The association replaced the wall tiles but did not replace the shelf after the repairs were completed. The unit owner sought, among other things, to have the association replace the shelf. The unit owner also sought to have the association repair tiles in the dining room of the unit which had “popped up” as a result of an unrelated water leak. The association’s declaration of condominium provided that the association was responsible to repair conduits and rough plumbing and provided that “[a]ll incidental damage caused to an apartment by such work shall be promptly repaired by the association.” The arbitrator ordered the association to replace the shelf, holding that the incidental damage to the shelf was caused by the repair to the rough plumbing, which was the association’s duty to maintain. As such, the incidental damage language of the declaration applied to the shelf. However, the arbitrator held the association was not responsible to replace the tiles in the dining room, as the damage to the tiles was not incidental to any work the association performed to repair the rough plumbing.
Therefore, Rock clearly establishes that while an association is responsible to repair portions of the unit that are damaged as a result of the association’s exercise of its maintenance, repair, and replacement obligation, the damage must be incidental to the association’s work.
If the declaration requires the association to repair or replace incidental damage to the unit, the association will likely be responsible to repair and replace owner modifications to the units, too, unless the declaration provides otherwise. In Brickell Town House Association, Inc. v. Del Valle, et al., Arb. Case No. 95-0133 Final Order (September 12, 1995), the association was required to remove certain owner-installed alterations to the unit in order to access and maintain the common elements. The unit owners asserted that the association was responsible to replace the alterations in accordance with the incidental damage provision in the declaration of condominium. The arbitrator agreed, holding that the association was required to reimburse the owners for the expenses required to restore the units to the condition which existed immediately prior to the association’s reconstruction activities, including betterments which were added by the unit owners since the original construction of the units by the developer.
In accordance with the holdings in Brickell and Rock, if the governing documents provide that the association is responsible for incidental damage to the unit, the association will likely be responsible to repair any portions of the unit damaged by the association’s exercise of its maintenance, repair, and replacement responsibility, including alterations made by owners (unless specifically provided for otherwise).
On a different note, if the governing documents of the association contain incidental damage language which is specific to damage caused to units, then the association will not be responsible for incidental damage caused to owner modifications to the common elements or the limited common elements. Similarly, the association will likely not be responsible to repair any damage to any owner alteration to a unit where the declaration required association approval and the owner failed to obtain same prior to installation of the improvement.
In Continental Towers, Inc. v. Nassif, Arb. Case No. 99-0866, Summary Final Order (November 24, 1999), the association needed to conduct concrete restoration, waterproofing, and other repairs to the unit owner balconies. The unit owners had installed tiles on the balcony and argued that the association was responsible for the replacement of the tile because the declaration provided that the association was responsible for incidental damage to the unit. However, the balcony was part of the common elements, not the unit. Therefore, the incidental damage language in the declaration did not apply to the tile, and, absent any other agreement between the parties, the association had no responsibility to repair and replace same. The arbitrator concluded that:
…in the absence of an agreement between the parties or a controlling provision of the documents, ‘it cannot be said from the mere fact of association permission that the association has assumed the perpetual obligation to remove and replace the personal property when necessary to repair and replace the common elements.’ The arbitrator adopts the rationale articulated in the Carriage House case. Since the balcony is a part of the common elements, and the tile was not part of the original construction, the unit owners are responsible for its removal and replacement.
Further, where there are owner modifications which were not approved as required by the declaration, the association will likely not be responsible to repair notwithstanding the incidental damage requirement set out in the declaration. In Harrison v. Land’s End Condominium Association, Inc., Arb. Case No. 94-0298, Final Order (June 27, 1995), the association was required to remove an owner-installed balcony finish in order to effectuate repairs to the balcony slab. In this case, the balcony was considered part of the unit, and the declaration contained a provision requiring the association to repair incidental damage to the unit. The declaration also required the owner to obtain approval of the association before making any alterations to the bal-cony. However, the owner never obtained such approval. Therefore, despite the incidental damage provision, the arbitrator determined that the association was not responsible to replace the balcony finish because the owner did not obtain association approval as required by the declaration.
Therefore, if an alteration requires association approval and an owner fails to obtain such approval, the association will far more likely not be responsible to repair any incidental damage to the alteration notwithstanding the existence of incidental damage language.
Generally, the association’s repair obligation is limited to actual damage caused to the unit as a result of its maintenance, repair, and replacement obligation. If the unit owners are required to vacate their unit in order for the association to effectuate the repairs, the association is not generally responsible to reimburse the owners for the costs of same. However, as the Brickell case, discussed above, shows us, that is not always the case. In Brickell, the owners also argued that the association was responsible to reimburse them for the costs they incurred in vacating the unit for the repairs. In this case, the association chose to proceed with a method of repairing damage to common element pipes from the interior of the units, which required the unit owners in the affected units to vacate. The association did not explore an option in which the repairs could be made from the exterior, which would permit the unit owners to remain in the unit. The arbitrator agreed with the owners and ordered the association to pay for the costs the owners incurred in vacating the units. As you can glean, this case is very fact specific, which led to this outcome.
In an order denying the association’s motion for rehearing, the arbitrator in Brickell, reiterated its earlier decision that the board, within its business judgment, decided to proceed with a method of reconstruction that required the removal of the owners. Therefore, the expenses of those owners are a common expense to be borne by all owners. The important consideration in this case was the fact that the association proceeded with the repairs from the interior without exploring options to proceed from the exterior. The arbitrator notes that the order should not be construed to mean that an association would be responsible for accommodations for all unit owners in the event that the condominium building had to be tented for termites, or if a hurricane rendered the building uninhabitable. In those cases, all owners would be required to vacate the units, and there can be no other decision of the board. Additionally, in Brickell, if there was no way for the association to make the repairs that would allow the owners to remain in unit, the arbitrator’s decision may have been different. How-ever, as the association chose to displace certain unit owners to effectuate the repairs without exploring any other options, the association was responsible for the owners’ costs to vacate.
Finally, even when there is no incidental damage language in the governing documents, the association may be responsible for damage to the units if the association fails to conduct necessary maintenance to the common elements, when the association knows that such maintenance is necessary. In Dibiase v. Beneva Ridge, Arb. Case No. 92-0210, Final Order (January 19, 1994), the association was aware that the common element parking area was consistently flooding into an owner’s unit. The association retained an engineer to conduct a drainage study, and the engineer recommended several remedial measures to address the drainage problem. While the association took some remedial steps, the association did not follow through on the study’s recommendations. The arbitrator concluded that the association was responsible for the owner’s costs to repair the unit caused by the flooding. The arbitrator explained that, while “[n]o association is required to protect the property against a 100-year storm…” the association was responsible to take those steps reasonably necessary to protect the condominium property.
As the association had an expert report that advised if the association did not take certain remedial measures, the damage to the condominium property would continue, the association had an obligation to make the repairs. As the association failed to follow the report, it was responsible for the damage caused to the unit.
In accordance with the decision in Dibiase, if the association receives a report from an expert advising that certain repairs must be performed, and the association fails to take action, the association may be responsible for the costs of any damage to the units caused by its failure to act.
As you have likely gleaned from the foregoing discussion, it can be difficult to determine who is responsible to repair and replace improvements damaged during the association’s exercise of its maintenance, repair, and replacement obligations. Given the complexities of the issue, your association should consult with its legal counsel with any inquiries regarding the association’s responsibility for incidental damage.
by Jeffrey Rembaum, Esq. of Kaye, Bender, Rembaum attorneys at law, legal practice consists of representation of condominium, homeowner, commercial and mobile home park associations, as well as exclusive country club communities and the developers who build them. Mr. Rembaum is a Certified Specialist in Condominium and Planned Development Law. He is the creator of ‘Rembaum’s Association Roundup’, an e-magazine devoted to the education of community association board members, managers, developers and anyone involved with Florida’s community associations. His column appears monthly in the Florida Community Association Journal. Every year since 2012, Mr. Rembaum has been selected to the Florida Super Lawyers list and was also named Legal Elite by Florida Trends Magazine. He can be reached at 561-241-4462.
Most condos and homeowners’ associations prepared their 2022 budgets in the fall of 2021. At that time, the expectation was for 3-4% inflation in 2022. Unfortunately, we are now dealing with CPI inflation of 8.6% in 2022 and real inflation in South Florida feels even higher. Even if you included 5% contingency in your budget, there is a possibility you may come up significantly short this year due to some costs that increased significantly more, e.g., property insurance. If you experienced a 10-15% raise in your insurance, you are likely on the low end of your peers. Many associations, especially older condominiums, are faced with 50%+ increases in insurance. Insurance is one of the largest components of most condo budgets, so this could create a significant financial challenge.
Does your association have enough operating cash to make it through the year? If you carry 2-3 months of “operating cash” in the bank, that means you should be in position to cover expenses that exceed 25% of your budget. However, you don’t want your association to be running with no contingency or emergency funds, and some associations may only be carrying 1 month or less excess operating cash on their balance sheet. Do you need to consider a special assessment to cover excess operating expenses for 2022? Some of you may need to do this especially if your insurance renews in the second half of the year and you have not seen the bill yet. Every association should be looking at their spend through the first half of the year and projecting out what the full year might look like. If you have not done the analysis yet, we recommend you do it soon, so your owners can be prepared if an assessment is required, or you need to start discussions on a significant budget increase being required for 2023.
Is there some way you can cut costs this year? It is very difficult to cut expenses mid-year. This typically requires service reductions or elimination of contracts. I don’t know any condo that pays for a service they don’t feel they need! So, this can be harder than you might think.
Furthermore, real estate values have significantly increased throughout most of South Florida. Now may not be the time to try to cut services or delay capital expenditures, new owners and prospective owners expect the service level to be commiserate with these elevated purchase prices and expectations are higher than ever.
Throughout the remainder of 2022, we will have a blog post each month discussing this inflation storm and offer tips for your association to ride it out.
It’s no doubt that global sea levels have been rising over the past century, and the rate has increased in recent decades. The Ocean Service estimates that in most areas, the rise is about one-eighth inch annually – a rate that barely noticeable from year to year, even for long-term coastal communities.
However, that slow encroachment is claiming residents’ land as well as associations’ common areas. Higher water levels also contribute to higher tides, king tides, which occur in conjunction with the solstice and full moon, and storm surges that erode beaches and redeposit sand where it can alter currents and affect shipping channels.
If you have higher water levels than you did a decade ago, then you have a greater likelihood of flooding during storms as sewers and levees are rendered ineffective because the water level is too high to accept the runoff.
In Jacksonville, I had a property that was on the Intracoastal and when the community was built in the 80’s, the water rarely came up into the community as there was plenty of marsh behind the community for the water to ebb and flow. By the time I managed this community in 2016, water was encroaching on the property regularly, even with small thunderstorms or wind storms which blew the water up into the community. Drains and sewers could not handle the influx of water, even from the smallest of storms anymore. Roads were regularly flooded and water blowing in from the Intracoastal literally “burned” landscaping from the salt water. The physical assault from salt water caused structural damage to our balconies and patios and parking lots, as well as damage to pools, equipment and pool decks.
So what do we do? The US Census data indicates that more than half of Americans live within 50 miles of the coast. That’s an increase of 45 percent since 1970. In the last decade, more than 2.5 million new residents have moved to Florida, which has more community associations than any other U.S. state. How will you protect your common areas and infrastructures over the long term?
As communities along the coast age, these problems will only worsen without intervention. Some communities are increasing the number of pump stations, and rebuilding roads and seawalls several feet above their current heights. Assessments in coastal communities should reflect the expectation that, over time, structures near the coast will need regular maintenance and in some cases, structures may need to be elevated, no doubt a significant expense.
Now is the time to monitor several locations that are prone to flooding already and investigate what options are available.
Parking is one of the most common “hot topics” that community associations face, particularly with those communities that were built with insufficient parking facilities. Parking problems range from unauthorized vehicles to non-conforming vehicles and/or vehicles parked in prohibited areas. As an alternative to towing, many Associations are considering immobilization, also known as boot or booting, which involves placing a mechanical device on a parked vehicle, designed to be attached to the wheel or tire to prohibit its operation. To the extent an association is deemed to be private property, shouldn’t the association have the absolute right to boot offending vehicles? Not quite so.
While, the Florida Statutes impose specific requirements on a community association or its designated representative prior to the towing of an improperly parked vehicle, there is presently no State Statute that specifically addresses booting of vehicles. However, city and county ordinances have specific requirements that must be followed.
In Miami-Dade County, Section 30-479 of the Miami-Dade Code of Ordinances sets forth specific requirements for immobilization or booting of vehicles. Generally speaking, Associations in Miami-Dade County wishing to boot vehicles must post prominently notice that vehicles are subject to immobilization. The mechanism for booting the vehicle must be installed on the front wheel of the driver’s side of the vehicle (if feasible), and an 8 ½ by 11-inch sticker must be placed on the rearmost portion of the window adjacent to the drivers’ seat of the vehicle, warning that any attempt to move the vehicle may result in damage to the vehicle, and providing specific contact information for the company that booted the vehicle. An association that improperly causes a vehicle to be immobilized may be liable to the vehicle owner for the cost of the services provided, any damages that results from the immobilization, the immobilization and attorney fees. Moreover, an Association cannot, by release or waiver limit or avoid liability for damages to a vehicle that has been improperly booted.
In Broward County, Section 20-176.19 of the Broward County Code of Ordinances also requires compliance with specific posted notice requirements, which must be prominently placed at specific locations throughout the property, specifically indicating, among other pertinent information, that a vehicle is “subject to immobilization”. The Broward ordinance, has several exceptions and/or alternate notice requirements, based on the size/type of property. Notably, when ordering immobilization of vehicles in Broward County, the Association is required to provide written instruction as to each individual vehicle to be immobilized. Moreover, the Association must have a written contract with the towing/immobilization company.
Palm Beach County’s ordinance (Section 19-131) on immobilization does not specifically apply to booting vehicles on private property such as that of an Association. Rather, the ordinance appears to address immobilization in the context of vehicles parked in spaces in all county-owned or -operated property designed as “RESERVED,” “HANDICAP,” in a traffic or fire lane, in an area designated as a “NO-PARKING ZONE,” or beyond the time limitations in a temporary parking space. If an Association wants to boot/immobilize a vehicle in Palm Beach County, it should engage with an experienced vendor and ensure that at a minimum, all towing ordinances are followed. However, it’s important to note that there is no specific regulation that addresses private property booting/immobilization in Palm Beach County.
In general, it is important to keep in mind that a vehicle may only be towed or booted from the property if the vehicle is parked on the property without the proper permission of the Association. Many community associations try to utilize towing or booting as an enforcement mechanism for unlawfully parked vehicles. However, this is not appropriate. Towing and/or booting should not to be used for unlawful vehicles themselves such as, for example, a commercial vehicle which is prohibited because the Association’s documents do not allow same. Its also important to note that an association may not accept money or other valuable consideration from any towing company or other person for the privilege of towing or removing vehicles from the Association’s property.
Lastly, before implementing any towing and/or booting policy, an association should work closely with its legal counsel to ensure that said policies do not run afoul of applicable law.
by Carolina Sznajderman Sheir, Partner, Eisinger Law
In a swift move during a Special Session, the Florida Legislature introduced and then unanimously passed legislation to reform Florida’s Condominium and Cooperative Acts (the “Acts”). Governor DeSantis convened the Special Session for an entirely different purpose – to address the growing property and casualty insurance crisis in Florida. Lawmakers, stinging from criticism for not reaching agreement on condominium/cooperative reform legislation during the 2022 Regular Session, which was their first opportunity to pass such legislation following the Champlain Towers tragedy in Surfside, apparently continued working “behind the scenes” after the Regular Session ended. That effort has culminated in the form of Senate Bill 4-D, which passed the House and Senate by unanimous vote, and the Governor has signed the bill into law. The important highlights of the new laws under Chapters 718 and 719, Florida Statutes follow.
MANDATORY MILESTONE INSPECTIONS OF CONDOMINIUMS AND COOPERATIVES
All condominium and cooperative buildings that are at least three stories or more in height must conduct a “milestone inspection” by a Florida licensed architect or engineer by December 31st of the year the building reaches 30 years of age. The 30-year mark will be measured from when the building received its certificate of occupancy. Three stories or higher condominium and cooperative buildings located within 3 miles of a coastline, however, will have to conduct their milestone inspection by December 31st of the year the building reaches 25 years of age. For condominium and cooperative buildings whose certificates of occupancy were issued before July 1, 1992, will have until December 31, 2024 to perform the initial milestone inspection. Local enforcement agencies will be required to determine and notify condominium and cooperative associations if they require a milestone inspection, in which case the milestone inspection will need to be completed within 180 days of receipt of notice from the local enforcement agency.
Milestone inspections will consist of two phases: Phase one is a visual inspection of the structural components of the building, both habitable and non-habitable, by a licensed architect or engineer. Phase one of the milestone inspection will be mandatory. The architect or engineer will be required to issue a report to the local building enforcement agency whether the phase one inspection revealed substantial structural deterioration to any building components, in which case, phase two will need to be performed. If a phase two inspection is necessary, a phase two inspection will involve either destructive or nondestructive testing, or both, which will be at the discretion of the inspector’s direction.
At the conclusion of the inspection process, the inspector will be required to issue a signed and sealed report to the local inspection authority and the condominium or cooperative association, detailing the manner and type of inspection performed, identifying any substantial structural deterioration, and describe the extent of the deterioration. The milestone inspection report will be an official record under the new law, and once completed, associations will be required to distribute a copy of the inspector-prepared summary of the milestone inspection report to all unit owners. The summary will also have to be posted conspicuously on association property, and the full report will need to be posted on an association website, if that association is required to have one.
STRUCTURAL INTEGRITY RESERVE STUDIES
The other major reform, SB-4D, implements anticipated changes to how and when condominium and cooperatives conduct reserve studies. The new laws require condominiums and cooperatives to perform a structural integrity reserve study. Section 718.103 of the Condominium Act and Section 719.103 of the Cooperative Act are amended to add the definition of “structural integrity reserve study” as a study of the reserve funds required for future major repairs and replacement of the common areas based on a visual inspection of the common areas. All condominiums will need to complete a structural integrity reserve study by December 31, 2024. Keep in mind, the study may be performed by any person qualified to perform such study; however, the visual inspection portion of the study must be performed by a licensed engineer or licensed architect. At a minimum, a structural integrity reserve study must identify the common areas being visually inspected, state the estimated remaining useful life and the estimated replacement cost or deferred maintenance expense of the common areas being visually inspected, and provide a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each common area being visually inspected by the end of the estimated remaining useful life of each common area.
The Structural integrity reserve study will need to be kept in the official records for fifteen (15) years from the date of the report. It must also be kept on the website for all condominiums required to have a website.
If an association fails to complete a structural integrity reserve study, that failure constitutes a breach of an officer’s and director’s fiduciary relationship to the owners. Also, if the officers or directors of an association willfully and knowingly fail to have a milestone inspection performed, the failure constitutes a breach of the officers’ and directors’ fiduciary relationship to the owners. This may also significantly impact directors’ and officers’ liability insurance premiums, or trigger insurance carriers to require proof of compliance before issuing or renewing policies.
Before a developer may turn over a condominium or cooperative, the developer of any building that is 3 stories in height or higher must complete a structural integrity reserve study, and has this document available at turnover
BUDGETING AND RESERVES
The amount to be reserved for required reserve items is determined by the most recent structural integrity reserve study. For all condominiums and cooperatives over 3 stories, line items must minimally include the roof, load bearing walls or other primary structural members, floor, foundation, fireproofing and fire protective systems, plumbing, electrical systems, waterproofing and exterior painting, windows, and any other item that has a deferred maintenance expense over $10,000.
Effective December 31, 2024, no unit owner-controlled condominium or cooperative will be permitted to vote to waive or partially fund the reserves. Condominiums and cooperatives must adequately fund reserves pursuant to the reserve study required. It is also prohibited to vote to use reserve for any other purpose for which they were intended. This applies to all condominiums and cooperatives, regardless of size or location.
NEW DEPARTMENT REGULATORY REQUIREMENTS
On or before January 1, 2023, condominiums and cooperatives that are in existence as of July 1, 2022 must provide the following to the Department of Business and Professional Regulation – Division of Condominiums, Timeshares, and Mobile Homes:
The name of the Association;
The total number of buildings that have 3 stories in height or higher;
The total number of units in all such buildings;
The counties in which the buildings are located and their physical address for each building.
If there are any changes to this information, it must be reported to the Division within six (6) months of any changes.
The Florida Department of Business and Professional Regulation – Division of Condominiums, Timeshares, and Mobile Homes has the power to enforce compliance for condominiums and cooperatives regarding completion of the milestone inspection reports, structural integrity reserve studies, and reserve funding.
WHAT DOES THIS ALL MEAN FOR YOUR ASSOCIATION?
These laws have been put in place to ensure that condominiums and cooperatives be maintained in such a way that all residents are kept safe and free from harm. For those associations who have been waiving or partially funding their reserves, this may mean some large financial increases. The 2.5-year grace period before waiving or partial funding of reserves expires gives boards time to plan for future assessments, but not much time, depending on how long your association has been underfunding reserves. The “bottom line” is all Florida condominiums and cooperatives need to begin planning now to be prepared for the December 31, 2024 deadline. If you have any questions regarding any of these legislative changes, we encourage you to contact your association’s attorney.
Steven R. Braten, Shareholder, Paula C. Marra, Senior Associate, Michael H. Casanover, Senior Associate, Rosenbaum PLLC
The Present: These days, we are driven and focused on data and media consumption. The fiber optic technology continues to strengthen and the need for gigabit speeds becomes more and more evident.
It is important to engage with a telecommunication service provider that specializes in community associations offering bulk discounted rates.
The Future -FTTH: (Fiber to the Home) connectivity is no longer a luxury; it is a necessity and a requirement to provide for virtual remote distance learning, video streaming, entertainment, security, telemedicine, Zoom conferencing, remote work, and the use of multiple devices. Fiber to the Home (FTTH) provides residents increased faster speeds. According to New Street Research, Company Data, over the next decade FTTH deployment could increase by 20 million to 60 million. This would take FTTH availability from 25 percent to 35 percent of households.
The market research firm Strategy Analytics stated that while in 2020 we spent $90.7 billion on traditional pay TV (an 8% drop from 2019) and $39.5 billion on streaming (a 34% jump from the year before), by 2024 legacy pay TV will only account for $74.47 billion—with streaming ahead at $76.3 billion.
Telecommunication services are changing and negotiating a contract that protects the residents and property values takes time, understanding and education! Determine what makes sense when upgrading the existing infrastructure to meet future needs.
Fiber optics, or optical fibers, are long, thin strands of carefully drawn glass about the diameter of a human hair. These strands are arranged in bundles called optical cables.
Fiber optic internet is the way of the future for delivering broadband.
As the industry shifts to fiber optic cable for faster internet speeds, many associations will be negotiating new contracts. With fiber optic internet, the association has the flexibility and infrastructure to increase up to 10 Gb speeds over a more reliable network. The installation of the physical fiber requires digging the fiber to the building and the over-build and launch process. Fiber has virtually unlimited bandwidth and its durability will last for years to come! Fiber is future ready and fast!
Things to Consider: When seeking a new service provider, here are some things to consider:
Does the association currently have a bulk service agreement for internet, television and/or phone services in place and if so, will it expire or renew within 24 months? It takes time to evaluate your options for your residents and common areas.
How much space is available in the association’s telecom rooms?
Does the agreement provide for an access or easement agreement and if so, what are the options?
How many different paths to the building can the fiber cable take?
Is there sufficient power for the fiber-optic technology?
Will the service and fiber technicians and employees of the telecommunications company be direct hires or are they subs/1099 employees?
What speeds does the service provider are offer for the upload and download? Are they symmetrical?
Does the service provider offer a community channel?
What options for programming will the service provider offer (retail) outside of what the association’s bulk contract will provide?
Are there any startup costs or installation fees?
What are the fees for a technician to come out for a non-related company service call?
Does the service provider offer bundling TV, internet, and phone service packages to homeowners to save money?
Does the service provider offer incentives for switching providers?
Does the service provider offer temporary suspensions for snowbirds/seasonal residents?
Does the service provider offer an assigned Account Manager?
Does the service provider offer an SLA (Service Level Agreement) defining the service requirements?
Does the service provider offer the latest and greatest Wi-Fi based mesh network solution?
Does the service provider offer security solutions?
Hotwire Communications is a pioneering leader in fiber optic technology and has been providing cutting – edge fiber-based telecommunication services since 2000. A Florida-grown company headquartered in Fort Lauderdale, Hotwire Communications has regional offices throughout the United States. Our client experience is our goal, and we strive to provide the white glove experience for internet, video, phone, and security services.
by Marcy L. Kravit, CMCA, AMS, PCAM, CFCAM, Director of Community Association Relations, Hotwire Communications, FCAP Program Coordinator
We recently held an educational “Painting Projects Planning Process” webinar with Rudy Forjan from Benjamin Moore to discuss planning for any upcoming painting projects.
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