Springtime is often considered to be a time of change, and this year it has brought forth a set of changes for our Florida “Far-Bar” residential contracts. Condominium and cooperative building associations, sellers, and Realtors will need to be aware of these changes as all contracts for such properties will now inform potential buyers of their right to receive a copy of a “Milestone Inspection” (the “Inspection”), a “Structural Integrity Reserve Study”(the “Study”), or a statement that the Inspection and/or Study has not yet been completed.
The Inspection is a structural inspection performed by a licensed architect or engineer to ensure building safety through an assessment of the building’s structural components and structural condition. The Inspection is broken down into Phase I and Phase II. Phase I is a visual examination of the building and its major structural components and results in a qualitative assessment of the building’s structural condition. If there are no signs of substantial structural deterioration, a Phase II will not be required. If required, a Phase II is then conducted to confirm the building is structurally sound and recommends a program for repairing the distressed and/or damaged portions of the building.
Associations will be required to conduct the Inspection within 180 days of receipt of notice from local law enforcement if:
- The condominium or cooperative building is three or more stories; and
- It is located more than three miles from the Florida coastline and has been occupied for 30 years or more; or
- It is located within three miles of the Florida coastline and has been occupied for 25 years or more.
The Inspection must be completed by December 31st of the year the building reaches the minimum age relative to distance from the coastline and must be repeated every 10 years thereafter. If the Inspection is required and the building’s Certificate of Occupancy was issued on or before July 1, 1992, the Inspection must be performed before December 31, 2024.
Upon completion of the Inspection, the inspector will submit a sealed copy of the Inspection report to the applicable association and the local building authority, along with a summary of material findings and recommendations. Associations must distribute the summary to all unit owners and renters and post a copy in a conspicuous place on the property. Associations required to maintain a website must also make the full report and the inspector’s summary available online.
Structural Reserve Study
The Study is designed to ensure that associations are reserving funds for the long-term maintenance and necessary replacement of ten critical structural elements in their buildings: roof, floor, load bearing walls, fireproofing and fire safety, exterior painting and water proofing, plumbing, electrical systems, foundation, windows, and any elements of the building which have an impact on its structural integrity and are valued at over $10,000.00. Funds for the repairs required under the Study cannot be waived by agreement or voted against by an association and must be collected according to the schedule for replacement provided in the Study. The funds can only be used for that specific named purpose and are not able to be pooled. In order to comply with the new law, associations must complete the Study by December 31, 2024, pursuant to the same timeframes set forth in the Inspection.
Associations will be responsible for all costs related to the Inspection and Study and must ensure compliance with all requirements. Sellers of condominium and cooperative units will be required, at the buyer’s request and at the seller’s sole cost, to provide the buyer with a copy of the Inspection and/or the Study upon entering into a contract for sale and purchase of the applicable properties. If the buyer requests the Inspection and the Study, but they have yet been performed, then the seller must provide a statement from the association that such has not yet occurred and why.
For further information on the requirements, we encourage readers to examine Florida Statute Chapter 718, Section 503 or contact real estate law attorney Laura Smidt at email@example.com.