Governor DeSantis on May 26th, 2022 signed into law SB 4D – Building Safety Act for condominium and cooperative associations. This bill applies to all condominiums and cooperatives with buildings that are 3 stories or more in height and was a passed in a special legislative session. This comes only 2+ months after the previous condominium/cooperative bills for 2022 died in the typical legislative session. Of primary note are mandatory requirements for “structural integrity reserve studies” and “milestone inspections.”
“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 milestone inspection must be performed once a building reaches 30 years of age and every 10 years thereafter. For buildings within 3 miles of the coast, it must be done at 25 years and every 10 years thereafter.
The “structural integrity reserve study” must be performed every 10 years starting no later than December 31, 2024.
Per the bill, “Structural integrity reserve study means 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. A structural integrity reserve study may be performed by any person qualified to perform such study. However, the visual inspection portion of the structural integrity reserve study must be performed by an engineer licensed under chapter 471 or an architect licensed under chapter 481. 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.”
It continues, “ An association must have a structural integrity reserve study completed at least every 10 years after the condominium’s creation for each building on the condominium property that is three stories or higher in height which includes, at a minimum, a study 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 1.-i., as determined by the licensed engineer or architect performing the visual inspection portion of the structural integrity reserve study.”
Analysis/Opinion: There are many potential problems with the bill. Although the Florida Legislature tried to seek out a more safety-centered set of regulations, there are likely to be several unintended consequences.
The structural integrity reserve study is a product that does not currently exist. The bill seems to conflate structure analysis and a reserve study. Professional engineers are good at performing condition analyses. Reserve analysts are good at performing reserve studies. However, they are two different skill sets and they will be tough to combine accurately.
Although the bill phrases this as a reserve study, this is essentially a structural engineering analysis. This is something that many current reserve study providers will not be able to perform. Conversely, this means many of the people providing this service will have limited reserve study experience. Thus, they have eliminated many of the experienced reserve analysts from helping put together a reserve study on these buildings. I think it will be a real challenge for condominiums and cooperatives to be able to find someone who can perform this service.
The cost of the structural integrity reserve study will be much more expensive than the traditional reserve study. For garden-style condominiums that have many buildings in their community, each building will have to have a structural inspection and that will likely cost well into the tens of thousands of dollars for the whole community.
The timeline for the structural integrity is also problematic. A traditional reserve study should be performed every 3-5 years, but the new law requires it every 10 years. Being that the cost of the structural integrity reserve study is going to be very expensive, many associations will likely only get it done every 10 years. This creates a situation where communities actually get fewer eyeballs on their buildings and grounds.
The bill takes a one-size-fits-all approach. There is a vast difference between a 3-story condominium complex with 10 buildings that sits 30 miles inland from the coast and a 12-story high rise directly on the coast. Yet, the new bill lumps them all together and requires that they fund the same items.
The bill will require condominiums and cooperatives to fund several items that they are currently not funding or really don’t need to fund. For instance, how do you estimate the remaining life and cost of a floor? Same question goes for a foundation that is not a problem?
In the wake of the Surfside tragedy, few seem to remember Champlain Towers South actually had a recent reserve study and had a recent structural engineering report. The real challenge comes in how associations will pay for expensive repairs when they are behind. What will happen when an association has $1M in reserves and they have expenses that are $10M? There is still no guaranteed mechanism to help bridge that difference. It is obvious that changes were needed after the Surfside tragedy. However, this bill is not a well thought out piece of legislation that is a practical solution.