What Does the Building Safety Act for Condominium and Cooperative Associations Mean for My Association?
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On May 26, 2022, Florida Governor Ron DeSantis signed the Building Safety Act for Condominium and Cooperative Associations (“Building Safety Act”) into law. The Building Safety Act brings sweeping changes to Florida’s condominium and cooperative association laws, particularly regarding building inspections and reserves. This article will provide an overview of the Building Safety Act with a focus on the key changes and how the Building Safety Act will impact Florida community associations.
The Building Safety Act
The Building Safety Act amends Chapters 468, 553, 718, 719, and 720 of the Florida Statutes. Passed as a somewhat direct response to the Surfside Condo collapse tragedy, this law brings several key changes that condo associations need to be aware of and prepare to implement.
The Building Safety Act implements inspection requirements, mandatory reserves, and increased transparency between an association and its members. For buildings over three stories tall, mandatory inspections begin once the building reaches 30 years of age and must occur every 10 years thereafter. However, for buildings within three miles of the coastline as defined by § 376.031 Florida Statutes, mandatory inspections must begin at year 25. Additionally, the Building Safety Act implements mandatory reserve funding for structural integrity components as well as removing associations’ ability to opt-out of funding reserves for structural integrity components.
The Building Safety Act also promotes transparency between the board of directors and association members, as the law requires the most recent structural integrity inspection report to be posted on the association’s website at all times. Further, the law requires a copy of an inspector-prepared summary of the inspection report be distributed to every unit owner. In addition to the inter-association transparency, the Building Safety Act sets up a more active role for local enforcement agencies. While the association itself remains responsible for compliance with the new requirements, the Building Safety Act also requires the local enforcement agency to provide the association with written notice once an inspection becomes required.
How do Structural Reserve Studies Differ from Current Reserve Studies?
One of the key changes to community association law brought about by the Building Safety Act is the creation of “structural integrity reserves”. Current association law allows encourages but does not mandate reserve studies and funding and allows unit owners to vote to opt-out of funding reserves during certain years. When the Building Safety Act takes effect in 2024, this will no longer be the case for a certain subset of reserves, called the structural integrity reserves.
A structural integrity reserve study takes a very similar form to the traditional reserve studies many associations regularly conduct. However, this is where the similarities stop. Funding of structural integrity reserves in accordance with the association’s most recent structural integrity reserve study is mandatory, and effective December 31, 2024, unit owners can no longer vote to opt-out of or limit funding for structural integrity reserve items. Further, differing from traditional reserves, the association cannot vote to use reserve funds dedicated to structural integrity items for any other purpose. Additionally, the law mandates that developers now must establish reserve accounts, rather than allowing them the option.
Structural integrity reserve studies must be conducted beginning once the building reaches 10 years of age and every 10 years thereafter. Additionally, developers must have a structural integrity reserve study completed for each building over three stories on the property prior to turnover. Structural integrity reserve studies must include the following:
- Load-bearing walls or other primary structural members;
- Fireproofing and fire protection systems;
- Electrical Systems;
- Waterproofing and exterior painting;
- Windows; and
- Any other item with a deferred maintenance expense or replacement cost in excess of $10,000 for which the failure to replace or maintain the item negatively affects the above listed items, as determined by the licensed inspector or architect performing the visual portion of the structural integrity reserve study.
How to Prepare Your Association for the Building Safety Act’s Changes
In preparation for the Building Safety Act’s full implementation in 2024, there are a few things associations can do to prepare. Being proactive is key, as almost every association in Florida will need access to a limited number of qualified professionals in a short period of time. For example, nearly all associations will rush to have structural integrity reserve studies completed in the next 18 months to meet the December 31, 2024 deadline, for owner-controlled associations existing prior to July 1, 2022. Additionally, for associations with buildings over three stories built prior to July of 1992, the board of directors should begin preparations now for the milestone inspection.
Another key date in the Building Safety Act is January 1, 2023. By this date, condominium associations must submit to the division in writing: the number of buildings on the condominium property over three stories in height; the total number of units in each building; the address of each building; and the county in which the building is located. Unit owners should also begin working with their association’s board of directors to prepare updated seller disclosures, as a copy of the summary of the milestone inspection and most recent structural integrity reserve study must be provided as part of the disclosure to prospective purchasers.
Associations should also initiate conversations with their attorneys about how to navigate the Building Safety Act’s implementation. As this article previously discussed, there will be more associations in need of inspections than there are available inspectors. This is an important point that the association should be discussing with their attorney, as failure to stay in compliance with the inspections and reserves required by the Building Safety Act will now be codified as a breach of the board of directors’ fiduciary duty.
The Building Safety Act brings significant reform to Florida community association law, although not without challenges. Preparation by community associations is key to a successful implementation of the Building Safety Act. The community association attorneys at Jimerson Birr can help your association get ahead of the game in preparation for the Building Safety Act.