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2023 Legislative Update

Senate Bill 154 (the “Milestone and SIRS Glitch Bill”)

• Effective immediately
• Applicable to Condominiums and Cooperatives

Following up on its passage of SB-4D, which created the Milestone Inspection and Structural Integrity Reserve Study requirements for all condominium and cooperative buildings that are 3 or more stories in height, this year the legislature passed SB-154, which modifies these requirements and more broadly addresses condominium and cooperative reserve funding obligations.

Milestone Inspection Report Deadlines:

• Associations with buildings that are three stories or higher, as determined by the Florida Building Code, and subject in whole or in part to condominium or cooperative ownership must have a milestone inspection conducted by December 31st of the year in which the building reaches 30 years of age from the date the certificate of occupancy was issued. Subsequent inspections must occur every 10 years thereafter.
• If a building reaches 30 years of age before July 1, 2022, the initial milestone inspection must be performed by December 31, 2024.
• If a building reaches 30 years of age on or after July 1, 2022, and before December 31, 2024, the initial milestone inspection must be performed before December 31, 2025.

The term "milestone inspection" refers to a structural inspection of a building, which includes an inspection of the load-bearing elements in the primary structural members and primary structural systems, as defined in Section 627.706, Florida Statutes. The inspection must be conducted by an architect licensed under Chapter 481 or an engineer licensed under Chapter 471. The purpose of the inspection is to assess the life-safety and adequacy of the building's structural components and determine the general structural condition that affects its safety. It also involves identifying any necessary maintenance, repairs, or replacements of structural components. A team of professionals may provide milestone inspection services, with an architect or engineer serving as the registered design professional in charge, and all work and reports must be signed and sealed by the appropriate qualified team member.

The Milestone Inspection is intended to discover “substantial structural deterioration,” which is defined as “significant structural distress or substantial structural weakness that has an adverse impact on a building's overall structural condition and integrity.”

In SB-4D, those eligible buildings located within 3 miles of a coastline were required to perform their milestone inspection within 25 years; however, that provision has been removed and replaced with authority for the local enforcement agency to determine if local circumstances, including environmental conditions such as proximity to saltwater, necessitate an earlier milestone inspection. Associations will be notified by such local agencies if they are required to perform the milestone inspection by the building’s 25th year.

Upon receiving notice from the local enforcement agency that the Association’s milestone inspection is due, the Association will have 180 days to complete the inspection. Following receipt of the written notice from the local agency, the Association must notify owners about the required milestone inspection requirement and deadline for completion. The local enforcement agency can grant an extension for the initial milestone inspection deadline if the Association demonstrates good cause, which includes have entered into a contract with the architect or engineer to have the inspection completed, if completion by the original deadline is not feasible.

Engineering inspection reports created prior to July 1, 2022 may suffice to satisfy the milestone inspection requirement if the inspection and report substantially comply with the requirements of SB-4D and SB-154. Such reports will need to be updated every 10 years.

If a phase two inspection is necessary, then, within a period of one hundred and eighty (180) days after submitting the phase one inspection report, the architect or engineer responsible for conducting the phase two inspection must provide a progress report to the local enforcement agency. This report should include a timeline for the completion of the phase two inspection. The phase two inspection will involve invasive testing to uncover the cause of the substantial structural deterioration identified by the architect or engineer.

Upon completing both the phase one and phase two milestone inspections, the architect or engineer who conducted the inspections must submit a sealed copy of the inspection report to the Association. Additionally, they must provide a separate summary of the significant findings and recommendations outlined in the inspection report. This submission should be made to any other owner who holds a portion of the building not governed by the condominium or cooperative form of ownership. Within forty-five (45) days after receiving the milestone inspection report, the Association must distribute the summary of the inspection report prepared by the inspector to each owner. The distribution should be done through United States mail or personal delivery to the owner's mailing address, property address, or any other address provided to fulfill the Association's notice requirements. If the owners have consented to electronic transmission, the summary can be sent via email. The Association must also post a copy of the summary report in a conspicuous location on the property and publish the complete report and summary on the Association's website if a website is required (for Associations with 150 or more units).

Necessary repairs identified by the inspector must begin no later than 365 days after receiving the report. If an Association fails to provide proof of repairs to the local government agency, such agency will review the situation and determine if the building is safe for occupancy.

The Florida Building Commission must establish rules for a building safety program by December 31, 2024, to facilitate the implementation of the milestone inspection within the Florida building code. The program must include inspection criteria, testing protocols, standardized forms for inspection and reporting (adaptable to electronic formats), and record maintenance requirements for the local authority.

In addition to the milestone inspection, all 3 story of higher condominium or cooperative buildings must also perform a Structural Integrity Reserve Study (SIRS) by December 31, 2024, with limited exception.

The SIRS is a mandatory reserve study that residential condominium and cooperative Associations must conduct for each building within the community that is 3 stories or higher in height, as determined by the Florida building code. The components of the study include:

• Roof;
• Structure, which encompasses load-bearing walls, primary structural members, and primary structural systems as defined in §627.706, Florida Statutes;
• Fireproofing and fire protection systems;
• Plumbing;
• Electrical systems;
• Waterproofing and exterior paint;
• Windows and exterior doors; and
• Any other item with a deferred maintenance expense or replacement cost exceeding $10,000, which, if not replaced or maintained, would negatively affect the items listed above as determined by the visual inspection portion of the structural integrity reserve study.

While the terms "floor" and "foundation" were removed from the SIRS list, they may still be included as part of “structure” or the “catch-all” category if the reserve specialist determines that they would negatively affect the listed items if they are not adequately maintained. Certain other items, such as sea walls and pools, may also be included despite not being part of the primary structure of the building if such components are deemed to be integral to the structural integrity of the building.

Items with a useful life in excess of 25 years, or for which a useful life cannot be readily ascertained, may not require funding, or may only require funding for deferred maintenance of such items.

While most Associations will be required to complete the SIRS by December 31, 2024, if an Association is required to complete a milestone inspection on or before December 31, 2026, it may conduct the structural integrity reserve study simultaneously with the milestone inspection.

SIRS reserve accounts must be fully funded beginning in 2025, and may not be used for any alternate purpose.

SB-154 also affects non-SIRS reserve funding for all condominium and cooperative Associations as follows:

• Whereas previously Associations could waive the full-funding of their reserves, or use reserve funds for non-reserve expenditures, with the consent of a majority of a quorum of the membership at a duly-noticed membership meeting, now the standard for such actions is a majority of the total voting interest.

House Bill 437

• Effective July 1, 2023
• Applicable to HOAs

Regardless of any covenant, restriction, bylaw, rule or other policy of an Association, and unless prohibited by law or ordinance, an Association may not restrict parcel owners or their tenants from installing, displaying, or storing any items on a parcel that are not visible from the parcel’s frontage or an adjacent parcel, including but not limited to:

• artificial turf;
• boats;
• flags; and
• recreational vehicles.

This new protection for homeowners presents an interesting enforcement challenge for Associations who will now likely need to perform enhanced inspections upon receiving complaints about items being stored in a rear or side yard. For example, what if an item is visible from the second floor of a neighboring home?

Regardless of any covenant, restriction, bylaw, rule or other policy of an Association, a homeowner may display up to 2 of the following flags in a respectful manner, including on a freestanding flag pole:

• The Unites States flag;
• The official flag of the State of Florida;
• a flag that represents the U.S. Army, Navy, Air Force, Marine Corps., Space Force, or Coast Guard;
• a POW/MIA flag; or
• a first responder flag.

House Bill 919 (the “Homeowners Association Bill of Rights”)

• Effective October 1, 2023
• Applicable to HOAs

In response to a number of significant instances of malfeasance committed by HOA Board members throughout the State, the legislature passed this bill aimed at curbing such behavior, instituting stricter penalties for violations, and affording individual homeowners additional rights irrespective of restrictions contained in the Association’s governing documents.

• Notice of all Board meetings must now also include a specific meeting agenda, which must be posted along with the notice for the required 48-hour period.
• Clarifies that an owner’s official address shall be the property address unless the owner has provided written notice to the Association of an alternate address.
• If the Association collects construction deposits from owners, such funds must not be co-mingled with the Association’s funds, and must be returned to the owner within 30 days of receiving notice of the completion of the project.
• It is prohibited for an officer, director, or manager of the association to solicit, offer to accept, or accept anything or service of value without providing consideration in return. The prohibition also applies to an officer, director, or manager of the association’s immediate family. If an officer, director, or manager knowingly violates this prohibition, they may be subject to monetary damages as stated in Section 617.0834, Florida Statutes. If the board determines that an officer or director has violated this provision, they must promptly remove the individual from their position, and the vacancy shall be filled according to the law for the remainder of the officer's or director's term. However, it is permissible for an officer, director, or manager to accept food with a value of less than $25.00 per person for consumption at a business meeting, or to receive services or goods related to a trade fair or education program.
• If an officer or director is charged by information or indictment with certain crimes, they must be removed from their position. These crimes include:
• forgery of a ballot envelope or voting certificate used in an election;
• theft or embezzlement involving Association funds or property;
• destruction of, or refusal to allow inspection or copying of, an official record of the Association within the statutorily required time period, in furtherance of any crime; or
• obstruction of justice.
• Officers and directors appointed by the developer must disclose their relationship to the developer to the association each calendar year while serving in their roles. Additionally, directors and officers appointed by the developer must disclose any other activity that may reasonably be seen as a conflict of interest. However, the appointment itself does not automatically create a presumption of a conflict of interest with regard to their official duties.
• All directors and officers, including those appointed by the developer, must disclose any activity that could reasonably be seen as a conflict of interest at least fourteen (14) days before voting on an issue or entering into a contract that involves a conflict. If certain acts occur without prior disclosure to the association, there is a rebuttable presumption of a conflict of interest:
• a director or officer, or their relative enters into a contract for goods or services with the association; or
• a director or officer, or their relative holds an interest in a business entity that conducts business with the association or proposes a contract or transaction with the association.
• Engaging in any of the following acts is considered fraudulent voting activity and is classified as a misdemeanor of the first degree:
• willfully and falsely swearing or affirming, or procuring another person to falsely swear or affirm, in connection with voting activities;
• perpetrating, attempting to perpetrate, or aiding in the perpetration of fraud related to a cast vote, to be cast, or attempted to be cast;
• fraudulently changing or attempting to change a member's ballot, ballot envelope, vote, or voting certificate to prevent them from voting or voting as they intended;
• menacing, threatening, or using bribery or any form of corruption, directly or indirectly, to influence, deceive, or deter a member during the voting process;
• offering or promising anything of value, directly or indirectly, to another member with the intention of buying their vote or corruptly influencing their vote. However, this provision does not apply to food served at election rallies or meetings, or to items of nominal value used as election advertisements, including campaign messages designed to be worn by a member; and
• using or threatening to use direct or indirect force, violence, intimidation, or any form of coercion or intimidation to induce or compel a member to vote or refrain from voting in an election or on a specific ballot measure.
• The fining process was further refined to clarify that conducting the hearing with the fining committee is mandatory, and cannot simply be presented as optional for the homeowner to request. The fining notice also now requires details of the alleged violation, the specific action required to rectify the violation (if applicable), and the date and location of the hearing, and may be sent via email if the owner has previously consented to receiving official notices by email. The owner has the right to attend the hearing through telephone or other electronic means. The fine must be approved by a majority of the committee. Following the hearing, the Association must provide written notice of its findings to the owner at their designated mailing or email address. If applicable, the notice must also be given to any occupant, licensee, or invitee of the parcel owner. The notice must include the committee's approved or rejected fines or suspensions and specific instructions on how the owner or tenant may cure the violation.

Senate Bill 360 - Construction Defect

• Effective April 1, 2023
• Applicable to Condos and HOAs

The Statute of limitations for construction defect claims now starts upon the issuance of a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, whichever is issued first. The Statue of Repose has been reduced from 10 years to 7 years, and also now starts upon the issuance of a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, whichever is issued first.

The effect this legislation will be dramatic to many communities that either have waited to begin exploring potential developer-related construction defect claims, or that have developers who intentionally delay the turnover process. Newly elected post-turnover Boards, and even pre-turnover Transition Committees, are now encouraged to evaluate potential developer-related claims on an expedited basis.