STRUCTURAL INSPECTION, RESERVE STUDIES, RESERVE FUNDING, AND ROOFING
In light of the Surfside tragedy last year, the Florida Legislature approved Senate Bill 4-D, which became effective upon becoming law when the Governor signed it on May 26th, 2022. This legislation affects condominium and cooperative buildings that are three stories or more in height.
Senate Bill 4-D amends Chapters 553, 718 and 719, Florida Statutes with respect to “milestone inspections”, “structural integrity reserve studies” and reserve funding.
Section 553.899, Florida Statutes, defines a “milestone inspection” as:
A structural inspection of a building, including an inspection of load-bearing walls and the primary structural members and primary structural systems as those terms are defined in Section 627.706, Florida Statutes by a licensed architect or engineer authorized to practice in Florida for the purposes of attesting to the life safety and adequacy of the structural components of the building and, to the extent reasonably possible, determining the general structural condition of the building as it affects the safety of such building, including a determination of any necessary maintenance, repair, or replacement of any structural component of the building. The purpose of such inspection is not to determine if the condition of an existing building is in compliance with the Florida Building Code or the fire safety code.
Condominium and cooperative associations must perform a milestone inspection for each building that is 3 or more stories high. This inspection must occur by December 31 of the year in which the building turns 30 years old (measured from the issuance of a certificate of occupancy for the building) and must be conducted every 10 years thereafter.
If a building is located within 3 miles of the coastline, each building that is 3 or more stories high must be inspected by December 31 of the year that is 25 years from issuance of the certificate of occupancy, and then every 10 years thereafter.
If a building’s certificate of occupancy was issued on or before July 1, 1992, the condominium or cooperative association must conduct a milestone inspection of the building before December 31, 2024.
Notwithstanding the deadlines discussed above, upon determining that a building must have a milestone inspection, the local enforcement agency (i.e., the City of Naples) must provide written notice of such required inspection to the condominium association or cooperative association by certified mail, return receipt requested. Within 180 days after receiving the written notice, the condominium association or cooperative association must complete phase one of the milestone inspection. For purposes of this section, completion of phase one of the milestone inspection means the licensed engineer or architect who performed the phase one inspection submitted the inspection report by e-mail, United States Postal Service, or commercial delivery service to the local enforcement agency.
An association must keep the milestone inspection as an official record for 15 years. Owners, tenants and prospective purchasers have a right to inspection the milestone inspection.
An officer or director who willfully and knowingly fails to have a milestone inspection performed is guilty of a breach of his or her fiduciary duties.
The first phase of a milestone inspection requires a visual examination by a Florida licensed architect or engineer. A second phase inspection is required only if the first phase inspection reveals substantial structural deterioration.
Structural Integrity Reserve Studies and Reserve Funding
A “structural integrity reserve study” is defined as:
A study of the reserve funds required for future major repairs and replacements of the common areas based upon a visual inspection by a Florida licensed architect or engineer.
The list of building components is more extensive than previously required by Chapters 718 and 719. These items include:
b. Load-bearing walls or other primary structural members.
e. Fireproofing and fire protection systems.
g. Electrical systems.
h. Waterproofing and exterior painting.
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 sub-subparagraphs a.-i., as determined by the licensed engineer or architect performing the visual inspection portion of the structural integrity reserve study.
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 that is 3 stories or higher.
A structural integrity reserve study must be completed every 10 years.
As of December 31, 2024, an association may not waive or partially fund reserves for building components required in a structural integrity reserve study.
Also, as of December 31, 2024, with respect to building components required in a structural integrity reserve study, an association may no longer use those itemized reserve funds and accrued interest for other purposes (i.e., the association may only use those reserve funds for their designated purposes. This raises the question as to whether an association must fund structural integrity reserves on the “straight-line” (component) method as opposed to the “pooling” method.
This portion of the legislation provides that a structural integrity reserve study is an official record, owners, tenants and prospective purchasers have a right to inspection the structural integrity reserve study and officers and directors are guilty of a breach of fiduciary duty.
Notification to Division of Florida Condominiums
On or before January 1, 2023, condominium associations existing on or before July 1, 2022 must provide the following information to the Division, by e-mail, U.S. mail, commercial delivery service or hand delivery, on a form posted on the Division’s website:
1. The number of buildings on the condominium property that are 3 stories or higher in height.
2. The total number of units in all such buildings.
3. The addresses of all such buildings.
4. The counties in which all such buildings are located.
The new legislation provides that if an existing roofing system or roof section was built, repaired, or replaced in compliance with the requirements of the 2007 Florida Building Code, or any subsequent editions of the Florida Building Code, and 25% or more of such roofing system or roof section is being repaired, replaced, or recovered, only the repaired, replaced, or recovered portion is required to be constructed in accordance with the Florida Building Code in effect, as applicable. A local government may not override such exemption by ordinance.