The Florida Legislature passed and the Governor has signed Florida Senate Bill SB-4D into law. These new condominium requirements are part of both the Florida Statutes 553 for Building Construction Standard as well as Florida Statutes 718 & 719 regulating Florida Condominiums, HOAs, and Cooperative Associations. The law pertains to all condominiums and co-ops 3-stories or higher. They require mandatory building inspections, structural reserve studies every 10 years, and spells out how reserve budgets are to be calculated and funded.
These new laws will impact every condominium and condo-owner in the State of Florida. These new requirements put additional inspection burdens on associations, the board of directors and their management, as well as impacting owners since the costs of these inspections and subsequent reserve requirements fall exclusively to the owners.
All condominiums and coops 3-stories or higher must now:
- Complete a “Milestone Inspection” at 30 years, and every 10 years after. Due December 31, 2024 for all condos existing before 1992.
- Complete a “Structural Integrity Reserve Study (SIRS)” completed no later than December 31, 2024 and every 10 years after
- Fully fund Reserves for those items listed in the SIRS.
Who pays for these? Owners do, either as part of the maintenance payment, or if sufficient funds aren’t available through a Special Assessment. The estimated cost for these inspection varies on many conditions, so I will not attempt to guess on the fees involved, but they could be substantial for taller buildings or associations with many buildings.
What is a Milestone Inspection?
[Section 553.899 of the Florida Statutes]
It is a structural inspection conducted by Florida Licensed Architect or Engineer as it affects safety and adequacy of the building(s). Defined by statute:
“Milestone inspection” means 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 s. 627.706, by a licensed architect or engineer authorized to practice in this state 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.
The term “substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. The State defines “substantial structural deterioration” as:
“..substantial structural distress that negatively affects a building’s general structural condition and integrity. The term does not include surface imperfections such as cracks, distortion, sagging, deflections, misalignment, signs of leakage, or peeling of finishes unless the licensed engineer or architect performing the phase one or phase two inspection determines that such surface imperfections are a sign of substantial structural deterioration.”
The Milestone Inspection has two Phases. During Phase 1 an architect/engineer performs a visual examination of habitable and non-habitable areas of a building, including the major structural components. They provide an assessment of the structural conditions of the building to the association. If the architect or engineer finds no signs of substantial structural deterioration then the inspection is complete.
However, if there is substantial structural deterioration, the Phase 2 inspection may involve destructive or nondestructive testing at the inspector’s direction. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building.
The results of the Phase 2 inspection must be delivered to not only the association, but disseminated to all owners and provided to the local governments which have jurisdiction. Local city and county governments are permitted to prescribe timelines and penalties with respect to compliance, as well as adopt an ordinance requiring that a condominium or cooperative association schedule or commence repairs for substantial structural deterioration within a specified timeframe. Regardless, repairs must begin with 1 year of the report.
It must also be posted on the association’s website, if they are required to have one per Florida Statute.
What elements are inspected in the Milestone Inspection?
The following is a basic list and may/may not apply to all buildings:
- Structure, including load-bearing walls and primary structural members and primary structural systems
- Fireproofing and fire protection systems
- Heating and cooling systems
- Electrical systems
- Swimming pool or spa and equipment
- Pavement and parking areas
- Drainage systems
- Irrigation systems
What is a Structural Integrity Reserve Study (SIRS)?
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. 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.
What elements are included in the SIRS?
At a minimum, a study (performed by a licensed engineer or architect) of the following items as related to the structural integrity and safety of the building:
- Load-bearing walls or other primary structural members
- Fireproofing and fire protection systems
- Electrical systems
- Waterproofing and exterior painting
- 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 subparagraphs a.-i.
For bullet-j above, this would certainly include Seawalls which is included in the Milestone Inspection. Curiously thought, Pavement and Parking Areas are not included on the minimum elements of SIRS, but are specifically mentioned in the statute for the Milestone Inspection.
How does the SIRS impact Reserve Funding and Owner Costs?
As of December 31, 2024 (so for the 2025 budget year), members of a unit-owner controlled association may not determine to provide no reserves or less reserves than required. Transaction…associations must fully-fund their reserve requirements for the items listed above a through j.
Many association members have voted to waive full reserve funding and only partially fund reserves in their annual budgets. This can be as low as 3%. Large associations with many common elements, with large land areas, with seawalls, or many buildings may be affected the most financially.
How and when these reserve funds must be paid and available is where there is a gray area in the statute. So it’s not possible at this time to say how much condo owners can expect their maintenance fees can increase, but they certainly will. Each line item on the reserve study has a useful life, and the calculation on what makes full-funding for each of these items must be calculated separately. High cost items with a short useful life will have the most impact.
What can I do as a Condo Owner?
Talk to your association board of directors or property management about what they plan on doing to comply with these statutes. Get involved in your associations budget planning committee to voice your position. Write your elected state representative to voice your concerns and objections to the revised statutes. But most importantly, start planning for a way to pay for the increased monthly cost in maintaining your condo in Florida. Because even if the legislature revises the ability for members to waive fully-funded reserves, they will most likely require at least a minimum near 50% or greater.