Florida Condominiums Have New Building and Reserve Funding Requirements
The State of Florida has mandated building inspections and increased reserve funding requirements for condominiums and cooperatives with three stories or more. These measures aim to enhance safety and financial stability in multi-story residential properties. Here’s what associations need to know to stay compliant.
Milestone Inspections
Condominium associations must have a milestone inspection performed for each building that has three or more stories by December 31 of the year in which the building is 30 years old and every 10 years thereafter. If a building reached 30 years of age before July 1, 2022, the building’s initial milestone inspection must be performed before December 31, 2024.
Structural Integrity Reserve Studies
Associations existing on or before July 1, 2022, must have a structural integrity reserve study (SIRS) completed by December 31, 2024, for each building on the condominium property that is three stories or higher in height. After the initial study, a SIRS must be completed at least every 10 years.
A structural reserve study includes at a minimum, a study of the following items:
- Roof
- Structure, including load-bearing walls and other primary structural members
- Fireproofing and fire protection systems
- Plumbing
- Electrical systems
- Waterproofing and exterior painting
- Windows and exterior doors
- 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 above
A structural integrity reserve study must contain the following:
- Each item in the list above that is on the condominium property must be identified and visually inspected.
- The estimated remaining useful life and the estimated replacement cost or deferred maintenance expense is calculated for each item.
- A reserve funding schedule is provided with a recommended annual reserve amount that achieves the estimated replacement cost or deferred maintenance expense of each item.
Florida statutes do not allow for the waiving or partial funding of the structural integrity reserves studies. However, membership can still vote to waive or reduce funding for nonstructural (non-SIRS) items.
Implications
These changes can introduce a set of challenges that affect an association’s reserve funding schedule in various ways. One particular challenge may be allocating existing reserve funds, particularly the funds that were previously pooled.
With the new legislation, there may be a need to reassess how these funds are segregated between SIRS items and non-SIRS items, ensuring that they align with the updated regulations and guidelines.
In addition, if the officers or directors of an association willfully and knowingly fail to complete the milestone inspection and/or or the structural integrity reserve study, such failure is a breach of an officer’s and director’s fiduciary relationship to the unit owners.
Learn More about Financial Health for Your Association
For more information about how your association should comply with regulations and maintain financial health, connect with your Warren Averett advisor directly or ask a member of our team to reach out to you.
The provided information is for your convenience and may not encompass all legislative alterations. We advise you to reach out to your attorney for precise details regarding legislative changes that could affect your association.
