Q&A – What Florida’s New Condo Laws Will Do – Driven By Braman Motorcars
Each day I feature a listener question sent by one of these methods.
Email: brianmudd@iheartmedia.com
Social: @brianmuddradio
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Today’s Entry: Brian, please explain what the new condo laws do and how much it could save us. We desperately need relief from rising HOA dues!!! Thank you.
Bottom Line: So yes, on Monday Governor DeSantis signed two bills into law aimed at providing relief to condo owners due to laws passed after the collapse of Champlain Towers South. The Condominium and Cooperative Associations law extends the reserve study requirement for one year and allows for a 2 year pause in reserve fund contributions to prioritize funding critical repairs identified in milestone inspections among other changes. The My Safe Florida Condominium Pilot Program law makes it easier for condo associations to obtain grants for needed repairs and upgrades. Both laws immediately took effect, so relief under the law has kicked in. So, in addressing today’s question, what does that look like?
Effectively every condo association that’s 30 years old or older stands to see relief from the passage of these laws, and many of the new rules apply to all condo associations regardless of a building’s age. The extent of the benefit depends on factors like the condition of the building, reserve levels, status with mandated inspections, etc. The crux of the changes under the reforms as outlined by the state are these:
- Extends the reserve study requirement for one year and allows for a 2 year pause in reserve fund contributions to prioritize funding critical repairs identified in milestone inspections
- Increases the replacement cost of repairs required to be reserved and considered in the Structural Integrity Reserve Study (SIRS) from $10,000 to $25,000 to prioritize critical repairs
- Provides additional funding options for associations to aid flexibility
- Enables boards and unit owners to terminate contracts if a property manger fails to follow requirements of the state’s condo laws
- Prohibits association managers whose license is revoked by DBPR from holding any role in a management firm or being licensed for 10 years
- Requires full disclosure of potential conflicts of interest and mandates competitive bidding for contracts to make repairs on condominiums
- Requires associations to provide more information and records online, making it easier for residents to access records and understand how their communities are managed, and money is spent
- Provides associations with the ability to deliver documents electronically
- Allows for increased video conference usage for meetings and electronic voting
- Requires condo associations to report information about their property to DBPR and provide additional association details, for state regulatory oversight
- Mandates data sharing among local governments to assess compliance with building safety requirements and understand the impact of reforms
- Increased financial transparency and requires that unit owners have access to their associations’ financial records
- Allows associations more time to complete detailed financial reports
- Requires funding method and related details for SIRS to be disclosed to unit owners and potential buyers and extends the time from 3 to 7 days prospective buyers have to review financial information
So that’s a lot! And so is the potential savings. Without getting into all of the nitty gritty details... For impacted condo associations, the range in potential savings is realistically between $1,750 to $4,900 per unit in year 1 with residual savings of $750-$3,700 per unit in subsequent years. So, this will figure to be substantive savings for owners in older condo buildings while providing a number of reforms for all condo owners regardless of the age of the building.
As for the My Safe Florida Condo law...here’s a quick rundown of what it does:
- Limits grant funding to improvements that will result in a mitigation credit, discount, or other discount
- Lowers approval requirements from all unit owners to 75 percent of unit owners who reside in the building
- Allows for roof replacements
- Prohibits a condo from applying for an inspection or a grant if an association has not complied with SIRS and Milestone Inspection requirements.
- Restricts eligibility to buildings that are three or more stories in height and contain at least two single-family dwellings
As for what you can expect for condo units that are able to access the grant money available through the program...
- Up to $1,750 per unit in grants
- 5%-20% in insurance savings
These two laws aren’t panaceas for addressing affordability challenges, many buildings facing expensive repairs and higher insurance costs will still have challenges going forward; however, the laws do allow for significant relief in addition to providing additional convenience and protections for homeowners.