The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Rules
BILL: PCS/CS/SB 1702 (703878)
INTRODUCER: Rules Committee
SUBJECT: Mandatory Building Inspections
DATE: February 22, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hunter Ryon CA Favorable
2. Oxamendi Imhof RI Fav/CS
3. Oxamendi/Hunter Phelps RC Pre-meeting
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
PCS/CS/SB 1702 (703878) by Rules establishes a mandatory milestone inspection requirement
for multifamily residential buildings. A milestone inspection is defined by the bill as a structural
inspection of a building by a Florida-licensed architect or engineer 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.
Under the bill, multifamily buildings that are three stories or more in height have a milestone
inspection once the building reaches 30 years in age, and every 10 years thereafter. If the
building is within three miles of coastline, the milestone inspection must be conducted when the
building reaches 20 years of age, and every 7 years thereafter. Inspections must be done by a
licensed architect or engineer. An initial milestone inspection must be performed before
December 31, 2024 if the building’s certificate of occupancy was issued on or before July 1,
1992.
The bill provides a two-phase milestone inspection process consisting of a phase one visual
inspection and a phase two structural inspection, which may involve more intensive destructive
and nondestructive testing, if the phase-one visual inspection identifies structural distress. Local
governments may prescribe timelines and penalties with respect to compliance.
REVISED: 2/22/22 BILL: PCS/CS/SB 1702 (703878) Page 2
The milestone inspection requirement does not apply to a two-family or three-family dwelling
with three or fewer habitable stories above ground.
Upon completion of the milestone inspections, the:
Architect or engineer who conducts the inspection must submit a sealed copy of the
inspection report to the local building official and the board of administration for the
condominium and cooperative association; and
Board must distribute a copy of the inspection report to each unit owner.
The bill directs the Florida Building Commission to establish “comprehensive structural and life
safety standards for maintaining and inspecting all buildings and structures” in Florida that are
three stories or more in height by December 31, 2022. These standards must be made available
for local governments to adopt at their discretion.
The bill revises the maintenance obligations for condominium and cooperative associations, to
provide that:
The association shall provide for the maintenance, repair, and replacement of specified
association property;
Necessary maintenance, repair, or replacement of condominium property is not a material
alteration or substantial addition to the common elements or to real property requiring unit
owner approval; and
The association is not liable for alternative housing costs, lost rent, or other expenses if a
resident must vacate a unit or is denied access to a common element for necessary
maintenance, repair, or replacement of condominium property.
Effective January 1, 2024, the bill requires condominium and cooperative associations with a
residential building that is three stories or more in height to conduct a reserve study at least once
every three years, and specifies the matters that must be considered in the reserve study. The
reserve study must include a schedule for the full funding of reserves. Under the bill, a reserve
account is fully funded when the actual or projected reserve balance in the reserve account is
equal in direct proportion to the fraction of useful life for a given component or components. The
board must annually review the results of the reserve study and make any necessary adjustments.
The bill revises the requirements for the funding of reserves, by:
Permitting associations to satisfy their reserves funding obligations by using an alternative
funding method; and
Authorizing the board to adopt a special assessment or borrow money without unit owner
voting or approval for the necessary maintenance, repair, or replacement of association
property, notwithstanding any provision in the declaration requiring prohibiting or limiting
such authority.
The bill maintains the current authority of members of condominium and cooperative
associations to vote to not provide reserves, reduce the funding of reserves, or to use reserves for
other than their intended purpose. However, the bill permits a developer to waive reserves only
if: BILL: PCS/CS/SB 1702 (703878) Page 3
The association’s reserve obligations are funded consistent with the reserve study currently in
effect; or
The association provides an alternative funding mechanism for the association’s reserve
obligations.
The bill expands unit owner access to records, and provides additional disclosures relating to the
funding of reserves by:
Adding reserve studies and inspection reports to the list of official records of the association
to which unit owners have the right to inspect and copy;
Requiring copies of a milestone inspection report to be maintained for 15 years instead of the
seven years required under current law;
Adding the reserve study and inspection reports to the list of documents a condominium
association of 150 or more units must make available on a website or through a mobile
device application;
Providing specific disclosures to unit owners in the annual budget as to any waiver or
reduction of required reserve funding or failure to fund reserves consistent with the reserve
study currently in effect;
Requiring developer and nondeveloper unit owners to provide copies of the milestone
inspection report, if inspection was required, and the reserve study to prospective buyers of
the unit.
Requiring developer and nondeveloper unit owners to give prospective buyers of a unit a
copy of the most recent reserve study and milestone inspection report before the applicable
voidability period; and
Providing specific disclosures in the prospectus or offering circular that must be provided to
prospective purchasers of a condominium unit regarding any waiver or reduction of required
reserve funding or failure to fund reserves consistent with the reserve study currently in
effect.
The bill provides for the mediation of disputes between unit owners and the association related to
failure of a governing body to perform a structural or life safety inspection, including the
milestone inspection, perform a reserve study, fund reserves, or make or provide necessary
maintenance or repairs of association property.
The bill also revises the post-election certification requirements for condominium and
cooperative association board members. Under the bill a board member for these associations
must certify by affidavit that he or she has read the declaration of condominium, articles of
incorporation, and cooperative proprietary lease, as applicable, and must complete an education
curriculum administered by an education provider approved by the Division of Florida
Condominiums, Timeshares, and Mobile Homes (division) within the Department of Business
the Professional Regulation (DBPR) within one year before, or 90 days after, his or her election
or appointment. Under current law, a board member must certify in writing, as opposed to “by
affidavit” as required in the bill, that he or she has read the applicable documents of the
association or completed the approved education curriculum.
The bill takes effect July 1, 2022. BILL: PCS/CS/SB 1702 (703878) Page 4
II. Present Situation:
Building Safety
The Florida Building Code
In 1974, Florida adopted legislation requiring all local governments to adopt and enforce a
minimum building code that would ensure that Florida’s minimum standards were met. Local
governments could choose from four separate model codes. The state’s role was limited to
adopting all or relevant parts of new editions of the four model codes. Local governments could
amend and enforce their local codes, as they desired.
1
In 1992, Hurricane Andrew demonstrated that Florida’s system of local codes did not work.
Hurricane Andrew easily destroyed those structures that were allegedly built according to the
strongest code. The Governor eventually appointed a study commission to review the system of
local codes and make recommendations for modernizing the system. The 1998 Legislature
adopted the study commission’s recommendations for a single state building code and enhanced
the oversight role of the state over local code enforcement. The 2000 Legislature authorized
implementation of the Florida Building Code (Building Code), and that first edition replaced all
local codes on March 1, 2002.
2
The current edition of the Building Code is the seventh edition,
which is referred to as the 2020 Florida Building Code (Building Code).
3
Chapter 553, part IV, F.S., is known as the “Florida Building Codes Act” (act). The purpose and
intent of the act is to provide a mechanism for the uniform adoption, updating, interpretation, and
enforcement of a single, unified state building code. The Building Code must be applied,
administered, and enforced uniformly and consistently from jurisdiction to jurisdiction.
4
The Florida Building Commission (commission) was statutorily created to implement the
Building Code. The commission, which is housed within the Department of Business and
Professional Regulation (DBPR), is a 19-member technical body made up of design
professionals, contractors, and government experts in various disciplines covered by the Building
Code.
5
The commission reviews several International Codes published by the International Code
Council,
6
the National Electric Code, and other nationally adopted model codes to determine if
the Building Code needs to be updated, and adopts an updated Building Code every three years.
7
1
The Florida Building Commission Report to the 2006 Legislature, Florida Department of Community Affairs, p. 4, at
http://www.floridabuilding.org/fbc/publications/2006_Legislature_Rpt_rev2.pdf (last visited Jan. 26, 2021).
2
Id.; see also DBPR, Building Code Information System, at: https://floridabuilding.org/c/default.aspx# (last visited
Feb. 21, 2022).
3
Id.
4
Section 553.72(1), F.S.
5
Section 553.74, F.S.
6
The International Code Council (ICC) is an association that develops model codes and standards used in the design,
building, and compliance process to “construct safe, sustainable, affordable and resilient structures.” International Code
Council, About the ICC, available at https://www.iccsafe.org/about/who-we-are/ (last visited Feb. 21, 2022).
7
Sections 553.73(7), F.S. BILL: PCS/CS/SB 1702 (703878) Page 5
Local Enforcement of the Florida Building Code
It is the intent of the Legislature that local governments have the power to inspect all buildings,
structures, and facilities within their jurisdiction in protection of the public’s health, safety, and
welfare.
8
Every local government must enforce the Building Code and issue building permits.
9
It
is unlawful for a person, firm, or corporation to construct, erect, alter, repair, secure, or demolish
any building without first obtaining a permit from the local government enforcing agency or
from such persons as may, by resolution or regulation, be directed to issue such permit, upon the
payment of reasonable fees as set forth in a schedule of fees adopted by the enforcing agency.
10
Any construction work that requires a building permit also requires plans and inspections to
ensure the work complies with the Building Code. The Building Code requires certain building,
electrical, plumbing, mechanical, and gas inspections.
11
Construction work may not be done
beyond a certain point until it passes an inspection. Generally speaking, a permit for construction
work that passes the required inspections is considered completed or closed.
12
The Florida Building Code does not contain mandatory requirements for the maintenance and
inspection of existing buildings in the state. However, local governments are empowered to enact
such requirements at their discretion to apply throughout a local jurisdiction. Some local
jurisdictions in the state have used the following model standards to aid in their adoption of local
requirements for the maintenance and inspections of existing buildings: the International
Property Maintenance Code, the Standard Housing Code, and the Standard Unsafe Building
Abatement Code, or some combination thereof.
13
Mandatory inspections of existing condominium buildings were once required by Florida law,
but the law was repealed shortly after enactment. In 2008, the Legislature mandated that every
condominium greater than three stories in height be inspected for maintenance, useful life, and
replacement costs of the common elements every five years by an engineer or architect licensed
in the state.
14
A condominium association could waive this requirement for five years by a
majority vote of interests present at a properly called meeting of the association.
15
This provision
was repealed in 2010.
16
8
Section 553.72, F.S.
9
Sections 125.01(1)(bb), 125.56(1), and 553.80(1), F.S.
10
Sections 125.56(4)(a) and 553.79(1), F.S.
11
2020 Florida Building Code (7th ed.), s. 110.
12
Doug Wise, Closing Inactive & Excluded Building Permits, Palm Beach County Planning, Zoning & Building Department,
Building Division, at: http://discover.pbcgov.org/pzb/building/BuildingCodes/PBO-
126%20%E2%80%93%20Closing%20Inactive%20and%20Excluded%20Building%20Permits.pdf (last visited
Feb. 21, 2022).
13
See Department of Business and Professional Regulation, 2022 Agency Legislative Bill Analysis for SB 1702 at p. 2
(Jan. 7, 2022) (on file with the Senate Committee on Regulated Industries).
14
Ch. 2008-28, Laws of Fla.
15
Id.
16
Ch. 2010-176, s. 59, Laws of Fla. BILL: PCS/CS/SB 1702 (703878) Page 6
Building Code Administrators and Inspectors and Plans Examiners
Building officials, inspectors, and plans examiners are regulated by the Florida Building Code
Administrators and Inspectors Board (FBCAIB) within the DBPR. The FBCAIB consists of nine
members appointed by the Governor and subjected to confirmation by the Senate.
17
A building code administrator, otherwise known as a building official, is a local government
employee or a person contracted by a local government who supervises building code activities,
including plans review, enforcement, and inspection.
18
A building code inspector (inspector) inspects construction that requires permits to determine
compliance with the Building Code and state accessibility laws. Inspectors are divided into
several different categories. An inspector’s ability to practice is limited to the category or
categories in which the inspector has been licensed. The inspector categories are:
19
Building inspector;
Coastal construction inspector;
Commercial electrical inspector;
Residential electrical inspector;
Mechanical inspector;
Plumbing inspector;
Residential inspector; and
Electrical inspector.
A plans examiner reviews plans submitted for building permits to determine design compliance
with construction codes. The term includes a residential plans examiner who is qualified to
determine that plans submitted for building permits comply with the applicable residential
building, plumbing, mechanical, electrical, gas, energy, accessibility, and other applicable
construction codes. A plans examiner’s ability to practice is limited to the category or categories
in which the plans examiner has been licensed. The plans examiner categories are:
20
Building plans examiner;
Plumbing plans examiner;
Mechanical plans examiner; and
Electrical plans examiner.
Threshold Building Inspections
In 1981, a “five-story Harbour Cay Condominium building in Cocoa Beach, Florida, collapsed
during the placement of concrete for the roof slab, killing 11 workers and injuring 23 more.”
21
In
response to this tragedy, the Legislature instituted threshold building inspections, requiring
17
Section 468.605, F.S.
18
Section 468.603(2), F.S.
19
Section 468.603(5), F.S.
20
Section 468.603(8), F.S.
21
National Institute of Standards and Technology, Harbour Cay Condominium Collapse Florida 1981,
available at https://www.nist.gov/el/harbour-cay-condominium-collapse-florida-1981 (last visited Jan. 26, 2022). BILL: PCS/CS/SB 1702 (703878) Page 7
licensed “special inspectors” to conduct inspections for all threshold buildings.
22
A special
inspector is a licensed architect or registered engineer who is certified under chs. 471 or
481, F.S., to conduct inspections of threshold buildings.
23
A threshold building is defined as any building which is greater than three stories or 50 feet in
height, or which has an assembly occupancy classification, as defined in the Building Code,
which exceeds 5,000 square feet in area and an occupant content of greater than 500 persons.
24
An enforcing agency must require a special inspector to perform structural inspections on a
threshold building during new construction or during repair or restoration projects in which the
structural system or structural loading of a building is being modified.
25
For a building that qualifies as a threshold building, a structural inspection plan must be
submitted by the special inspector and the design professional of record to the enforcing agency
prior to the issuance of a building permit for the construction of or modification to the building.
26
However, a fee-simple owner may declare a building a threshold building even when it does not
meet the definitions.
27
The inspection plan for a threshold building provides specific inspection instructions to provide
for the adequate inspection of the construction. The owner must retain the services of a special
inspector who must inspect the building according to the special inspection plan. In addition, the
inspector must determine that a professional engineer who specializes in shoring design has
inspected the shoring and reshoring for conformance with the shoring and reshoring plans
submitted to the enforcing agency.
28
Special inspectors report directly to local building
administrators and officials. The role of threshold building inspectors is unique to Florida.
29
There were 8,515 active Building Code Administrators/Inspectors licensed in Florida in Fiscal
Year 2020-2021.
30
Local Building Recertification Programs
Florida does not require recertification of buildings or regular inspections of existing buildings,
which is consistent with state building codes across the country. Miami-Dade and Broward
Counties have amended their local building codes requiring a recertification process and
inspection of buildings 40 years and older. Miami-Dade’s program was established in the 1970s,
22
Florida Building Commission, Florida Building Construction Standards available at
https://www.floridabuilding.org/fbc/commission/FBC_0413/Commission_Education_POC/173/173-1-MATERIAL%20.pdf
(last visited Jan. 26, 2022).
23
See s. 553.71, F.S.
24
Id.
25
Section 553.79(5)(a), F.S.
26
Id.
27
Id.
28
Id.
29
Florida Board of Professional Engineers, What Are Threshold Building Inspectors?, available at https://fbpe.org/what-are-
threshold-building-inspectors/ (last visited Jan. 26, 2022).
30
Department of Business and Professional Regulation, 2020-2021 Annual Report, Division of Certified Public Accounting,
Division of Professions, Division of Real Estate, Division of Regulation at p. 20, at
http://www.myfloridalicense.com/DBPR/os/documents/DivisionAnnualReport_FY2021.pdf (last visited Jan. 27, 2022). BILL: PCS/CS/SB 1702 (703878) Page 8
and Broward County’s program was modeled after Miami-Dade’s and has been in effect since
January 2006.
31
Miami Dade’s recertification program states that:
All buildings, except single-family residences, duplexes and minor
structures as defined below, shall be recertified in the manner described
below where such buildings or structures have been in existence for forty
(40) years or longer, as determined by the Building Official, who shall at
such time issue a Notice of Required Inspection to the building owner.
Subsequent recertification shall be required at ten (10) years interval. In
the event a building is determined to be structurally and electrically safe
under the conditions set forth herein, and such building or structure is less
than forty (40) years of age, recertification shall not be required for a
minimum of ten (10) years from that time, or age forty (40), whichever is
the longer period of time.
32
Inspection procedures shall “conform, in general, to the minimum inspection procedural
guidelines” issued by the county, and are for the purpose of determining the general structural
condition of the building or structure to the extent reasonably possible which affects the safety of
the building or structure.
33
Miami-Dade’s recertification program exempts buildings under 2,000
square feet,
34
and Broward’s program exempts buildings under 3,500 square feet.
35
The
inspections must be carried out by a professional engineer or architect registered with the State
of Florida.
36
Following the 2021 tragedy in Surfside, Florida, where a 12-story condominium building, known
as Champlain Towers South, unexpectedly experienced structural failure and partially collapsed,
resulting in the death of 98 people, the concept of recertification programs gained considerable
attention. The City of Boca Raton recently instituted a building recertification program for
buildings over 30 years of age that are greater than three stories or 50 feet in height, or greater
than 5,000 square feet and have an occupancy greater than 500 people.
37
31
Broward County, Building Safety Inspection Program, available at
https://www.broward.org/CodeAppeals/Documents/Broward%20County%20Building%20Safety%20Inspection%20Program
.pdf (last visited Jan. 26, 2022).
32
See Code of Miami-Dade, ch. 8 Building Code, s. 8-11(f)(ii), at https://library.municode.com/fl/miami_-
_dade_county/codes/code_of_ordinances?nodeId=PTIIICOOR_CH8BUCO_ARTIAD_S8 -11EXBU (last visited
Jan. 26, 2022).
33
Id. at s. 8-11(f)(i).
34
Id. at s. 8-11(f)(ii).
35
Broward County , Building Safety Inspection Program, available at:
https://www.broward.org/CodeAppeals/Documents/Broward%20County%20Building%20Safety%20Inspection%20Program
.pdf (last visited Jan. 19, 2022)
36
Id. and See Code of Miami-Dade, ch. 8, Building Code, s. 8-11(iv).
37
City of Boca Raton. Ordinance 5589, available at: https://www.myboca.us/DocumentCenter/View/28152/Ordinance-No-
5589?bidId= (last visited Jan. 21, 2022) BILL: PCS/CS/SB 1702 (703878) Page 9
Community Associations
Chapters 718, 719, and 720, F.S.
Chapter 718, F.S., relating to condominiums, ch. 719, F.S., relating to cooperatives, and ch. 720,
F.S., relating to homeowners’ associations, provide for the governance of these community
associations. The chapters delineate requirements for notices of meetings,
38
recordkeeping
requirements, including which records are accessible to the members of the association,
39
and
financial reporting.
40
Timeshare condominiums are generally governed by ch. 721, F.S., the
“Florida Vacation Plan and Timesharing Act.”
Division of Florida Condominiums, Timeshares, and Mobile Homes
The Division of Florida Condominiums, Timeshares, and Mobile Homes (division) within the
Department of Business the Professional Regulation (DBPR) administers the provisions of
chs. 718 and 719, F.S., for condominium and cooperative associations, respectively. The division
may investigate complaints and enforce compliance with chs. 718 and 719, F.S., for associations
that are still under developer control.
41
The division also has the authority to investigate
complaints against developers involving improper turnover or failure to transfer control to the
association.
42
After control of the condominium is transferred from the developer to the unit
owners, the division has jurisdiction to investigate complaints related to financial issues,
elections, and maintenance of and unit owner access to association records.
43
For cooperatives,
the division’s jurisdiction extends to the development, construction, sale, lease, ownership,
operation, and management of residential cooperative units.
44
As part of the division’s authority to investigate complaints, the division may subpoena
witnesses, take sworn statements from witnesses, issue cease and desist orders, and impose civil
penalties against developers, associations, and association board members.
45
If the division has reasonable cause to believe that a violation of any provision of ch. 718, F.S.,
ch. 719, F.S., or a related rule has occurred, the division may institute enforcement proceedings
in its name against any developer, bulk assignee, bulk buyer, association, officer, or member of
the board of administration, or its assignees or agents. The division may conduct an investigation
and issue an order to cease and desist from unlawful practices and to take affirmative action to
carry out the purpose of the applicable chapter. Also, Florida law authorizes the division to
petition a court to appoint a receiver or conservator to implement a court order or to enforce an
injunction or temporary restraining order. The division may also impose civil penalties.
46
38
See ss. 718.112(2), 719.106(2)(c), and 720.303(2), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
39
See ss. 718.111(12), 719.104(2), and 720.303(4), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
40
See ss. 718.111(13), 719.104(4), and 720.303(7), F.S., for condominium, cooperative, and homeowners’ associations,
respectively.
41
Sections 718.501(1) and 719.501(1), F.S.
42
Id.
43
Section 718.501(1), F.S.
44
Section 719.501(1), F.S.
45
Sections 718.501(1) and 719.501(1), F.S.
46
Id. BILL: PCS/CS/SB 1702 (703878) Page 10
Unlike condominium and cooperative associations, homeowners’ associations are not regulated
by a state agency. For homeowners’ associations, the division’s authority is limited to the
arbitration of recall election disputes.
47
Condominiums
A condominium is a “form of ownership of real property created under ch. 718, F.S,”
48
the
“Condominium Act.” Condominium unit owners are in a unique legal position because they are
exclusive owners of property within a community, joint owners of community common
elements, and members of the condominium association.
49
For unit owners, membership in the
association is an unalienable right and required condition of unit ownership.
50
A condominium association is administered by a board of directors referred to as a “board of
administration.”
51
The board of administration is comprised of individual unit owners elected by
the members of a community to manage community affairs and represents the interests of the
association. Association board members must enforce a community's governing documents and
are responsible for maintaining a condominium's common elements which are owned in
undivided shares by unit owners.
52
There are 1,529,764 condominium units in Florida operated by 27,588 associations.
53
Approximately 912,376 of these condominium units in Florida are at least 30 years in age.
54
Further breakdown of the age of condominium units in Florida is as follows:
105,404 units – 50 years old or older;
479,435 units – 40-50 years old;
327,537 units – 30-40 years old;
141,773 units – 20-30 years old;
428,657 units – 10-20 years old; and
46,958 units – 0-10 years old.
55
It is estimated that there are over 2 million residents occupying condominiums 30 years or older
in Florida, based upon census data of approximately 2.2 persons living in an average
condominium unit.
56
Cooperatives
Section 719.103(12), F.S., defines a “cooperative” to mean:
47
See s. 720.306(9)(c), F.S.
48
Section 718.103(11), F.S.
49
See s. 718.103, F.S., for the terms used in the Condominium Act.
50
Id.
51
Section 718.103(4), F.S.
52
Section 718.103(2), F.S.
53
Report of the Florida Bar RPPTL Condominium Law and Policy Life Safety Advisory Task Force (Task Force Report), p.
4, available at: https://www-media.floridabar.org/uploads/2021/10/Condominium-Law-and-Policy-Life-Safety-Advisory-
Task-Force-Report.pdf (last visited Jan. 21, 2022).
54
Id.
55
Id.
56
Id. BILL: PCS/CS/SB 1702 (703878) Page 11
[T]hat form of ownership of real property wherein legal title is vested in a
corporation or other entity and the beneficial use is evidenced by an
ownership interest in the association and a lease or other muniment of title
or possession granted by the association as the owner of all the
cooperative property.
A cooperative differs from a condominium because, in a cooperative, no unit is individually
owned. Instead, a cooperative owner receives an exclusive right to occupy the unit based on their
ownership interest in the cooperative entity as a whole. A cooperative owner is either a
stockholder or member of a cooperative apartment corporation who is entitled, solely by reason
of ownership of stock or membership in the corporation, to occupy an apartment in a building
owned by the corporation.
57
The cooperative holds the legal title to the unit and all common
elements. The cooperative association may assess costs for the maintenance of common
expenses.
58
There are 778 cooperative associations in Florida that are registered with the
DBPR.
59
Official Records – Condominium and Cooperative Associations
Florida law specifies the official records that condominium and cooperative associations must
maintain.
60
Generally, the official records must be maintained in Florida for at least seven
years.
61
Certain of these records must be accessible to the members of an association.
62
Additionally, certain records are protected or restricted from disclosure to members, such as
records protected by attorney-client privilege, personnel records, and personal identifying
records of owners.
63
Condominium associations with 150 or more units are required to post digital copies of specified
documents on their website or make such documents available through an application that can be
downloaded on a mobile device.
64
Cooperative associations are not required to maintain such a
website.
Budgets and Reserves - Condominium and Cooperative Associations
Condominium and cooperative associations must have a budget of estimated revenues and
expenses.
65
The board must adopt the annual budget at least 14 days before the start of the
association's fiscal year.
66
57
See Walters v. Agency for Health Care Administration, 288 So.3d 1215 (Fla. 3d DCA 2019), review dismissed 2020 WL
3442763 (Fla. 2020).
58
See ss. 719.106(1)(g) and 719.107, F.S.
59
See Task Force Report, pp. 4-5.
60
See ss. 718.111(12) and 719.104(2), F.S., relating to condominium and cooperative associations, respectively.
61
See ss. 718.111(12)(b) and 719.104(2)(b), F.S., relating to condominium and cooperative associations, respectively.
62
See ss. 718.111(12)(a) and 719.104(2)(a), F.S., relating to condominium and cooperative associations, respectively.
63
See ss. 718.111(12)(c) and 719.104(2)(c), F.S., relating to condominium and cooperative associations, respectively.
64
Section 718.111(12)(g), F.S.
65
Sections 718.112(2)(f) and 719.106(1)(j), F.S., relating to the annual budget for condominium and cooperative
associations, respectively.
66
Id. BILL: PCS/CS/SB 1702 (703878) Page 12
In addition to annual operating expenses, the budget must include reserve accounts for capital
expenditures and deferred maintenance. Reserve accounts must include, but are not limited to,
roof replacement, building painting, and pavement resurfacing, regardless of the amount of
deferred maintenance expense or replacement cost, and any other item that has a deferred
maintenance expense or replacement cost that exceeds $10,000.
The amount to be reserved must be computed using a formula based upon the estimated
remaining useful life and estimated replacement cost or deferred maintenance expense of each
reserve item. Replacement reserve assessments may be adjusted annually to take into account
any changes in estimates or extension of the useful life of a reserve item caused by deferred
maintenance.
67
Condominium and cooperative associations must maintain reserve funds and any interest accrued
on the reserve funds in the reserve account or accounts. Reserve funds may be used only for
authorized reserve expenditures unless their use for other purposes is approved in advance by a
majority vote of unit owners at a duly called meeting of the association.
68
Condominium and cooperative associations, and their developers, may vote to not fund reserves,
i.e., waive reserves, or to provide reserves less adequate than required.
69
Reserve Studies
A reserve study determines how much an association needs to collect in annual reserve
contributions for the board to afford capital projects when they are needed. A reserve study
includes a physical inspection of the association’s property and a financial analysis of the
association’s current reserves, payments by unit or homeowners into the association’s reserve
account, and anticipated future expenditures, thus allowing the community to pay for capital
projects as they become necessary.
70
Nine states require a reserve study or a reserve schedule for
condominium associations.
71
Current law does not require condominium and cooperative associations in Florida to conduct a
reserve study.
Financial Reporting - Condominium and Cooperative Associations
Sections 718.11(13), 719.104(4), and 720.303(7), F.S., provide comparable financial reporting
requirements for condominium and cooperative associations, respectively.
Within 90 days following the end of the fiscal or calendar year, or annually on such date as
provided in the association’s bylaws, the board must complete, or contract with a third party to
67
Sections 718.112(2)(f)2.a. and 719.106(1)(j)2., F.S., relating to condominium and cooperative associations, respectively.
68
Sections 718.112(2)(f)3. and 719.106(1)(j)3., F.S., relating to condominium and cooperative associations, respectively.
69
Id.
70
See Community Association Institute, Understanding and Utilizing Your Reserve Study to Ensure Long-Term Success, at:
https://www.caidc.org/understanding-and-utilizing-your-reserve-study-to-ensure-long-term-success/ (last visited Jan. 29,
2022).
71
See Community Association Institute, Reserve Requirements and Funding, at:
https://www.caionline.org/Advocacy/Priorities/ReserveStudy/Pages/default.aspx (last visited Jan. 29, 2020). The nine states
are: California, Colorado, Delaware, Hawaii, Nevada, Oregon, Utah, Virginia, and Washington State. BILL: PCS/CS/SB 1702 (703878) Page 13
complete, the financial report. Within 21 days after the financial report is completed by the
association or received from the third party, but no later than 120 days after the end of the fiscal
year, the board must provide each member of the association a copy of the financial report or a
notice that it is available at no charge upon a written request.
The division must adopt rules setting forth uniform accounting principles, standards, and
reporting requirements for cooperative associations.
72
For condominium associations, the
division’s rulemaking authority is broader; the division must adopt rules setting forth uniform
accounting principles and standards to be used by all condominium associations and addressing
the financial reporting requirements for multicondominium associations. For condominium
associations, the division’s rules must include, but not be limited to:
…standards for presenting a summary of association reserves, including a
good faith estimate disclosing the annual amount of reserve funds that
would be necessary for the association to fully fund reserves for each
reserve item based on the straight-line accounting method. This disclosure
is not applicable to reserves funded via the pooling method. In adopting
such rules, the division shall consider the number of members and annual
revenues of an association.
Developer Turnover Report - Condominium and Cooperative Associations
In a condominium or cooperative association, when the unit owners other than the developer are
entitled to elect the majority of the board for the association, the developer must relinquish
control of the association to the unit owners other than the developer. The developer of a
condominium or cooperative is required to give certain items to the association when this change
of control occurs.
73
In a condominium association, the developer must give the association a turnover inspection
report which is included in the official records, under seal of an architect or engineer authorized
to practice in Florida, that attests to required maintenance, useful life, and replacement costs of
the following applicable common elements:
74
Roof.
Structure.
Fireproofing and fire protection systems.
Elevators.
Heating and cooling systems.
Plumbing.
Electrical systems.
Swimming pool or spa and equipment.
Seawalls.
Pavement and parking areas.
72
Section 719.104(4)(a), F.S.
73
Sections 718.301 and 719.301, F.S., relating to the transfer of association control for condominium and cooperative
associations, respectively.
74
Section 718.301(4)(p), F.S. BILL: PCS/CS/SB 1702 (703878) Page 14
Drainage systems.
Painting.
Irrigation systems.
The developer of a cooperative is not required to provide a turnover inspection report.
Pre-sale Disclosures - Condominium and Cooperative Associations
Developers and nondeveloper owners of condominium or cooperative units must give certain
documents to a prospective buyer or lessee before the execution of a contract for the sale of a
residential unit.
75
The developer may not close for 15 days following the execution of a purchase contract, or
execution of a lease of a residential unit for an unexpired term of more than five years, and the
delivery of the required documents to the buyer, including the documents creating the
association, the bylaws, and the estimated operating budget of the association. A prospective
purchaser may void the contract within 15 days of his or her receipt of all the required
documents.
76
A nondeveloper unit owner must provide the prospective buyer or lessee certain information,
including the articles of incorporation, bylaws and rules, a copy of the most recent financial
information, and a “Frequently Asked Questions and Answers” document.
77
These documents
must be provided more than three days, excluding Saturdays, Sundays, and legal holidays, before
the execution of the contract, or the sales contract is voidable by the prospective purchaser.
These disclosures do not apply to the leasing of a residential unit by a nondeveloper owner.
78
Each contract for sale of a residential unit must contain in conspicuous type a statement
acknowledging that the purchaser has received the document and his or her right to void the
contract if the required documents are not provided more than three days, excluding Saturdays,
Sundays, and legal holidays, before the execution of the contract.
Prospectus or Offering Circular - Condominium and Cooperative Associations
Every developer of a residential condominium or cooperative which contains more than 20
residential units, or which is part of a group of residential condominiums or cooperatives which
will be served by property to be used in common by unit owners of more than 20 residential
units, must prepare a prospectus or offering circular and file it with the division prior to entering
into an enforceable contract of purchase and sale of any unit or lease of a unit for more than five
years. A copy of the prospectus or offering circular must be provided to each buyer.
79
75
Sections 718.503 and 719.503, F.S.
76
Sections 718.503(1) and 719.503(1), F.S., providing the developer disclosures before the sale or lease of a residential
condominium or cooperative unit, respectively.
77
See ss. 718.503(2) and 719.503(2), F.S., providing the nondeveloper disclosures before the sale of a residential
condominium or cooperative unit, respectively.
78
Id.
79
Sections 718.504 and 719.504, F.S., requiring a prospectus or offering circular for a residential condominium or
cooperative unit, respectively. BILL: PCS/CS/SB 1702 (703878) Page 15
The prospectus or offering circular must contain certain information about the condominium or
cooperative, including an estimated operating budget for the condominium and the association,
and a schedule of the unit owner's expenses.
80
Alternative Dispute Resolution - Condominium and Cooperative Associations
Section 718.1255, F.S., provides an alternative dispute resolution process for certain disputes
between unit owners and condominium associations. Before the institution of court litigation,
other than an election or recall dispute, a party to a dispute must either petition the division for
nonbinding arbitration or initiate presuit mediation.
Disputes in cooperative associations, including recall election disputes, are subject to the same
alternative dispute resolution requirements and procedures applicable to condominiums set forth
in s. 718.1255, F.S.
81
Alternative dispute resolution offers a more efficient, cost-effective option to court litigation, but
alternative dispute resolution should not be used as a mechanism to encourage the filing of
frivolous or nuisance suits.
82
Alternative dispute resolution is required for any disagreements between two or more parties that
involves:
83
The authority of the board of directors to require an owner to take any action, or not to take
any action, involving that owner's unit or the appurtenance thereto and the authority of the
board of directors to alter or add to common areas or elements;
84
The board of directors' failure:
o To properly conduct elections;
o Give adequate notice of meetings;
o Properly conduct meetings;
o Provide access to association books and records; and
A plan of termination pursuant to s. 718.117, F.S.
The division does not have jurisdiction to arbitrate or mediate disputes between a unit owner and
an association that involve:
85
Title to any unit or common element;
The interpretation or enforcement of any warranty;
The levy of a fee or assessment, or the collection of an assessment levied against a party;
The eviction or other removal of a tenant from a unit;
Alleged breaches of fiduciary duty by one or more directors; or
80
See ss. 718.504(21) and 719.504(20) and (21), F.S., requiring certain budget information for the condominium or
cooperative be included in the prospectus or offering circular, respectively.
81
Sections 719.1255 and 719.106(1)(f), F.S.
82
Section 718.1255(3)(b), F.S., providing legislative findings regarding the advantages of pre-suit alternative dispute
resolution.
83
Section 718.1255(1)(a), F.S., defining the term “dispute.”
84
Id.
85
Id. BILL: PCS/CS/SB 1702 (703878) Page 16
Claims for damages to a unit based upon the alleged failure of the association to maintain the
common elements or condominium property.
Recall and election disputes in condominium, cooperative, and homeowners’ associations are not
eligible for presuit mediation and must be arbitrated by the division or filed directly with a court
of competent jurisdiction.
86
Arbitration is binding on the parties if all parties in arbitration agree to be bound in a writing
filed in the arbitration,
87
or if a complaint for a trial de novo is not filed in a court of competent
jurisdiction in which the condominium is located within 30 days after the arbitration decision is
rendered.
88
The filing fee for a petition to the division to initiate nonbinding arbitration or presuit mediation
is $50.
89
The division employs full-time arbitrators and may certify private attorneys to conduct
mandatory nonbinding arbitration.
Current law also encourages parties to a condominium dispute to participate in voluntary
mediation through a Citizen Dispute Settlement Center as provided in s. 44.201, F.S.
90
The mediation of disputes in condominium and cooperative association is regulated under
s. 720.311, F.S., which also provides for the mediation of the certain homeowner association
disputes under ch. 720, F.S. An aggrieved party in a dispute must initiate the mediation
proceedings by serving a written petition for mediation to the opposing party. The petition must
be in the format provided in s. 720.311, F.S., and must identify the specific nature of the dispute
and the basis for the alleged violations. The written offer must include five certified mediators
that the aggrieved party believes to be neutral. The serving of the petition tolls the statute of
limitations for the dispute. If emergency relief is required, a temporary injunction may be sought
in court before the mediation.
91
The opposing party has 20 days to respond to the petition. If the opposing party fails to respond
or refuses to mediate, the aggrieved party may proceed to civil court. If the parties agree to
mediation, the mediator must hold the mediation within 90 days after the petition is sent to the
opposing parties. The parties share the costs of mediation except for the cost of attorney’s fees.
Mediation is confidential, and persons who are not parties to the dispute (other than attorneys or
a designated representative for the association) may not attend the mediation conference.
92
86
Section 718.1255(5), F.S.
87
Section 718.1255(4)(a), F.S.
88
Section 718.1255(4)(k), F.S.
89
Section 718.1255(4)(a), F.S.
90
Section 718.1255(2), F.S.
91
Id.
92
Section 720.311(2)(b), F.S. BILL: PCS/CS/SB 1702 (703878) Page 17
The bylaws for condominium and cooperative associations must provide for mandatory dispute
resolution.
93
Post-Election Certification by Board Members
Within 90 days after being elected or appointed, a new board member for a condominium,
cooperative, or homeowners’ association must certify in writing to the secretary of the
association that he or she:
94
Has read the declaration of condominium for all condominiums operated by the association
and the declaration of condominium, articles of incorporation, cooperative proprietary
lease,
95
homeowners’ association’s covenants, bylaws, and current written policies, as
applicable;
Will work to uphold such documents and policies to the best of his or her ability; and
Will faithfully discharge his or her fiduciary responsibility to the association’s members.
As an alternative to a written certification, the newly elected or appointed director may submit a
certificate of satisfactory completion of the educational curriculum within one year before the
election or 90 days after the election or appointment.
96
The curriculum must be administered by a
condominium education provider approved by the division.
97
A certification is valid and does not
have to be resubmitted as long as the director continuously serves on the board.
A board member is suspended from service on the board until he or she files the written
certification or submits a certificate of completion of the educational curriculum.
98
If a
suspension occurs, the board may temporarily fill the vacancy during the period of suspension.
The secretary of the association must keep the written certification or educational certificate for
inspection by the members for five years after a board director’s election or the duration of the
director’s uninterrupted tenure, whichever is longer.
99
The validity of any action by the
condominium board is not affected by the association’s failure to have the certification on file.
100
93
Section 718.112(2)(k) and 719.106(1)(l), F.S., relating to condominium and cooperative associations, respectively.
94
Sections 718.112(2)(d)4.b., 719.106(1)(d)b., and 720.3033(1)(a), F.S., provide a post-election certification requirement for
newly elected condominium, cooperative, and homeowners’ association board members, respectively.
95
A newly elected member of the board of a cooperative association must also certify that they have read the “proprietary
lease,” which is an instrument that gives a shareholder in a cooperative association the right to occupy a particular dwelling
unit. See Bankrate, What is a Proprietary Lease?, available at: https://www.bankrate.com/glossary/p/proprietary-lease/ (last
visited Feb. 21, 2022).
96
The division’s Internet site provides a listing of approved educational providers for the certification of board members. See
Department of Business and Professional Regulation, Condominium & Cooperatives – Education, at
http://www.myfloridalicense.com/dbpr/lsc/documents/ListofApprovedProviders.pdf (last visited Feb. 21, 2022). This listing
also includes training for Homeowners’ Associations and some Mobile Home training.
97
Sections 718.112(2)(d)4.b., 719.106(1)(d)b., and 720.3033(1)(a), F.S.
98
Id.
99
Id.
100
Id. BILL: PCS/CS/SB 1702 (703878) Page 18
Recommendations from Government and Private Sector Groups
In response to the tragic loss of 98 lives suffered in the collapse of Champlain Towers South, the
following local governments and industry groups organized to review current law and to make
recommendations to prevent another building collapse:
Broward County Condominium Structural Issues Committee;
101
Miami-Dade County Commission;
102
The Florida Building Commission’s Hurricane Research Advisory Committee;
103
The Florida Bar Real Property, Probate, and Trust Law Section’s Condominium Law and
Policy Life Safety Advisory Task Force;
104
The Miami-Dade Grand Jury;
105
and
The Community Associations Institute.
106
The findings and recommendations from these government and private sector groups are
extensive, addressing a variety of issues. The recommendations from these diverse groups are
too numerous to address in this analysis. However, these groups made recommendations that
may differ in the specifics but are similar in certain respects, including making recommendations
for a state-wide certification program for high-rise condominiums; limiting or prohibiting the
waiving of reserves by condominium associations, and requiring condominium associations to
conduct reserve studies.
III. Effect of Proposed Changes:
The bill amends provisions in chs. 718 and 719, F.S., to provide for the inspection and
maintenance of condominium and cooperative buildings, the funding of necessary reserves for
the maintenance and repair of such buildings, and other provisions to provide unit owners with
better access to relevant information regarding building safety and their association’s funding of
reserves.
101
Broward County Commission, Summary Report and Recommendations of the Broward County Condominium Structural
Issues Committee, on file with the Regulated Industries Committee.
102
See Miami-Dade County, Miami-Dade County convenes a series of discussion meetings with elected leaders to pursue
policy reforms in wake of Surfside tragedy, Aug. 4, 2021, https://www.miamidade.gov/releases/2021-08-04-mayor-surfside-
meetings.asp (last visited Jan. 30, 2022).
103
Florida Building Commission, Hurricane Research Advisory Committee, August 27, 2001, Agenda, available at:
https://www.floridabuilding.org/fbc/commission/FBC_1021/HRAC/HRAC_Agenda.htm (last visited Jan. 30, 2022).
104
The Florida Bar, Report of the Florida Bar RPPTL Condominium Law and Policy Life Safety Advisory Task Force, Oct.
12, 2021, available at:
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwj78tuW_dn1AhX5hHIEHTUFAxU
QFnoECBMQAQ&url=https%3A%2F%2Fwww -media.floridabar.org%2Fuploads%2F2021%2F10%2FCondominium-Law-
and-Policy-Life-Safety-Advisory-Task-Force-Report.pdf&usg=AOvVaw2YITYoD__3yZbtvU0eKfYm (last visited Jan. 30,
2022).
105
Eleventh Judicial Circuit of Florida in and for the County of Miami-Dade, Final Report of the Miami-Dade Grand Jury,
Dec. 15, 2021, available at: https://miamisao.com/wp-content/uploads/2021/12/GRAND-JURY_202112151434-1.pdf (last
visited Jan. 30, 2022).
106
Community Associations Institute, Condominium Safety Public Policy Report, Oct. 2021, available at:
https://www.caionline.org/HomeownerLeaders/DisasterResources/Documents/CAI Condo Safety Public Policy Report 10
21.pdf (last visited Jan. 30, 2022). BILL: PCS/CS/SB 1702 (703878) Page 19
Inspection and Maintenance of Condominium and Cooperative Property
Mandatory Milestone Inspections
The bill creates s. 553.899, F.S., to require all multifamily residential buildings, including
condominium and cooperative buildings, that are three stories or more in height to have a
“milestone inspection” conducted by a licensed Florida architect or engineer.
The bill defines the term “milestone inspection: to mean:
a structural inspection of a building, including an inspection of load-
bearing walls and primary structural members and primary structural
systems, as defined in s. 627.706, F.S.,
107
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.
Under the bill, the purpose of the milestone inspection is not to determine if the condition of an
existing building is in compliance with the Florida Building Code (code) or the fire safety code.
The milestone inspection must to be conducted by December 31, 2024, if the building received a
certificate of occupancy on or before July 1, 1992. Buildings that are subject to the inspection
requirement must be inspected by December 31 of the year in which the building reaches 30
years of age, based on the date the certificate of occupancy was issued, and every 10 years
thereafter.
However, if the building is located within 3 miles of a coastline, it must have a milestone
inspection by December 31 of the year the building reaches 20 years of the age, based on the
date the certificate of occupancy was issued, and every 7 years thereafter.
The owner of the building, or the condominium or cooperative association, as applicable, is
responsible for all costs associated with the inspection.
The bill provides a two-phase milestone inspection process:
A Phase One inspection is a visual inspection of the property. If no signs of structural distress
are found by the visual inspection, the architect or engineer may issue an inspection report.
A Phase Two inspection is required if the Phase One inspection identifies any structural
distress. A Phase Two inspection may involve destructive and nondestructive testing at the
description of the special inspector.
107
Section 627.706, F.S., relating to sinkhole insurance, defines the term “primary structural member” to mean a structural
element designed to provide support and stability for the vertical or lateral loads of the overall structure,” and the term
“primary structural system” to mean an assemblage of primary structural members. BILL: PCS/CS/SB 1702 (703878) Page 20
The milestone inspection requirement does not apply to a two-family or three-family dwelling
with three or fewer habitable stories above ground.
A milestone inspection must be conducted by a Florida-licensed architect or engineer who
conducts the inspection to submit a sealed copy of the inspection report to the condominium’s
board of administration upon the completion of a phase one or phase two inspection. However,
the inspector in charge of a phase two milestone inspection must be a licensed engineer or
licensed architect with a minimum of five years’ experience designing structural components and
five years’ experience inspecting existing buildings of similar size, scope, and type of
construction.
The architect, engineer, or special inspector who performs the inspection must submit a sealed
copy of the inspection report with a separate summary of, at minimum, the material findings and
recommendations in the inspection report to the building owner, or if the building is a
condominium or cooperative, to the condominium or cooperative association and to the building
official of the local government that has jurisdiction.
The association must distribute a copy of the inspection report to each unit owner, regardless of
the findings or recommendations in the report, by United States mail or personal delivery; must
post a copy of the inspector-prepared summary in a conspicuous place on the condominium or
cooperative property; and must publish the full report and inspector-prepared summary on the
association’s website, if the association is required to have a website.
The bill authorizes local governments to prescribe timelines and penalties with respect to
compliance.
The bill directs the Florida Building Commission to establish “comprehensive structural and life
safety standards for maintaining and inspecting all buildings and structures” in Florida that are
three stories or more in height by December 31, 2022. These standards must be made available
for local governments to adopt at their discretion.
The Developer Turnover Inspection Report
The bill amends s. 718.301(4)(p), F.S., which requires the developer to provide a turnover
inspection report to the association when the nondeveloper unit owners are entitled to elect the
majority of the board of administration,
108
to require that the turnover inspection report comply
with the milestone inspection requirements in s. 553.899, F.S., notwithstanding the date of
issuance of the certificate of occupancy or the height of the building.
The bill also amends s. 718.301(4)(p), F.S., which specifies the components of the common
elements that must be included in the developer’s turnover report, to:
Include “waterproofing” among the building components that must be addressed in the
turnover report; and
Require the developer to attest to the condition of the listed components.
108
See s. 718.301, F.S., specifying the events that entitle unit owners other than the developer to elect at least a majority of
the members of the board of administration of an association. BILL: PCS/CS/SB 1702 (703878) Page 21
For the condominium turnover report, the bill changes the term “common elements”
109
to the
broader term "association property.”
110
The bill creates s. 719.301(4)(p), F.S., to provide a developer turnover report requirement for the
inspection of listed components that is identical to that required for condominiums under
s. 718.301(4)(p), F.S., as amended by the bill.
Maintenance of Condominium Property
The bill amends s. 718.113, F.S., which provides that maintenance of the common elements is
the responsibility of the condominium association and details the maintenance obligations for
condominium boards, to provide that:
The association shall provide for the maintenance, repair, and replacement of the applicable
condominium property identified in s. 718.301(4)(p), F.S., except for any maintenance
responsibility for limited common elements
111
assigned to the unit by the declaration;
After turnover of control to the unit owners, the association must perform any required
maintenance for which it bears responsibility identified by the developer in the turnover
report until the association obtains new maintenance protocols from a licensed professional
engineer or architect;
Necessary maintenance, repair, or replacement of condominium property is not a material
alteration or substantial addition to the common elements or to real property requiring unit
owner approval; and
The association is not liable for alternative housing costs, lost rent, or other expenses if a
resident must vacate a unit or is denied access to a common element for necessary
maintenance, repair, or replacement of condominium property.
The bill creates s. 719.105(5), F.S., to provide identical obligations for maintenance of the
cooperative property by the cooperative association.
In addition, the bill provides that maintenance of cooperative property is the responsibility of the
association, which is identical to the provision in current law in s. 718.113(1), F.S., for
condominium associations.
Reserves
Reserve Studies
The bill amends the budget reserve provisions in ss. 718.112(2)(f) and 719.106(1)(j), F.S., to:
Effective January 1, 2024, require condominium and cooperative associations with a
residential building that is three stories or greater to conduct a reserve study at least once
every three years;
109
Section 718.103(8), F.S., defines the term “common elements” to mean “the portions of the condominium property not
included in the units.”
110
Section 718.103(3), F.S., defines the term “association property” to mean “that property, real and personal, which is
owned or leased by, or is dedicated by a recorded plat to, the association for the use and benefit of its members.”
111
Section 718.103, F.S., defines “limited common elements” to mean those common elements which are reserved for the use
of a certain unit or units to the exclusion of all other units, as specified in the declaration. BILL: PCS/CS/SB 1702 (703878) Page 22
Require associations to provide reserves for the building components listed in
ss. 718.301(4)(q) and 719.301(4)(q), F.S., instead of reserves for roof replacement, building
painting, and pavement resurfacing, regardless of the amount of deferred maintenance
expense or replacement cost, and any other item that has a deferred maintenance expense or
replacement cost that exceeds $10,000;
Provide for the content of the reserve study, including:
o A summary of any inspection, including the milestone inspection under s. 553.899, F.S.,
and the findings a recommendations from such inspections;
o Identification of the structural components of a building for which the reserves can be
established and those for which reserves cannot be established because the useful life of
the component cannot be determined;
o An estimate of the useful life for those structural components for which a useful life may
be estimated;
o An estimate of applicable costs to maintain, repair, replace, or restore those common
elements;
o The total annual assessment that may be necessary to cover the cost to maintain, repair,
replace, or restore those common elements; and
o A schedule for the full funding of reserves.
Under the bill, a reserve account is fully funded when the actual or projected reserve balance in
the reserve account is equal in direct proportion to the fraction of useful life for a given
component or components multiplied by the current replacement costs for the component or
components.
Under the bill, the board must annually review the results of the reserve study and to make any
necessary adjustments.
The reserve study requirements in the bill do not apply to condominium and cooperative
associations with a building under three stories.
The bill specifies budget requirements for associations, including a description of the funding
plan and the procedures used for estimating reserves.
Funding Reserves
The bill creates a new ss. 718.103(1) and 719.103, F.S., applicable to condominium and
cooperative associations, respectively, to define the term “alternative funding method” to mean:
… the funding of a reserve account by other than an assessment or special
assessment which may reasonably be expected to fully satisfy the
association’s reserve funding obligations, including, but not limited to,
payments into the reserve account by a developer who is offering units, or
any other method approved by the [Division of Florida Condominiums,
Timeshares & Mobile Homes].
The bill amends ss. 718.112(2)(f) and 719.106(1)(j), F.S., to revise the requirements for the
funding of reserves by condominium and cooperative associations, respectively, by: BILL: PCS/CS/SB 1702 (703878) Page 23
Permitting developers to satisfy their reserves funding obligations by using an alternative
funding method; and
Incorporating the findings and recommendations of the reserve study into the association’s
annual budget.
The bill amends s. 718.115(1)(a) and 719.107(1)(f), F.S., relating to the common expenses for
condominium and cooperative associations, respectively, to provide that, notwithstanding any
provision in the declaration requiring prohibiting or limiting a board of administration’s authority
to adopt a special assessment or to borrow money on behalf of the association, including any
provision in the governing documents requiring unit owner voting or approval, the board may
adopt a special assessment or borrow money for the necessary maintenance, repair, or
replacement of the condominium or cooperative property identified in ss. 718.301(4)(p) and
719.301(4)(p), F.S, respectively.
Waiving Reserves
The bill maintains the current authority of members of condominium and cooperative
associations to vote to not provide reserves, reduce the funding of reserves, or to use reserves for
other than their intended purpose. However, the use of reserves for a purpose other than
authorized reserve expenditures is authorized without a vote of the membership in the exercise of
the condominium and cooperative associations’ emergency powers under ss. 718.1265 or
719.128, F.S., respectively.
The bill clarifies that the majority vote required to not provide reserves, reduce the funding of
reserves, or to use reserves for other than their intended purpose is a majority vote of all the
voting interests.
112
The bill also amends ss. 718.112(2)(f) and 719.106(1)(j), F.S., to revise the requirements for
waiving of reserves by a developer. Before turnover, the bill permits a developer to waive
reserves if:
The reserves are funded consistent with the reserve study currently in effect; or
An alternative funding mechanism for the association’s reserve obligations is used.
Transparency - Access to Records and Disclosures
Official Records
The amends ss. 718.111(12(a) and 719.104(2)(a), F.S., to include reserve studies, the milestone
inspection report, and any other inspection report relating to a structural or life safety inspection
to the list of documents that condominium and cooperative associations, respectively, must make
available for inspection or copying by members of the association. The bill requires copies of
112
Section 718.103(30), F.S., defines the term “voting interests” to mean “the voting rights distributed to the association
members pursuant to s. 718.104(4)(j), F.S. In a multicondominium association, the voting interests of the association are the
voting rights distributed to the unit owners in all condominiums operated by the association. On matters related to a specific
condominium in a multicondominium association, the voting interests of the condominium are the voting rights distributed to
the unit owners in that condominium.” BILL: PCS/CS/SB 1702 (703878) Page 24
inspection reports to be maintained for 15 years. Under current law, official records must be
maintained for seven years unless otherwise provided by general law.
113
The bill also amends s. 718.111(12)(g), F.S., which requires an association of 150 or more units
to make specified documents available on a website or through an application that can be
downloaded on a mobile device, to include the inspection reports and reserve studies among the
types of documents such association must maintain on the website or application.
The bill does not provide a comparable provision requiring cooperative associations to publish
these records on the internet or through a mobile device. Under current law, ch. 719, F.S., does
not require cooperative associations of any size to publish specified records on a website or
through a mobile devise.
Budget Disclosures
The bill amends ss. 718.112(2)(f) and 719.106(1)(j), F.S., to require that the budget for the
condominium and cooperative associations, respectively, must include a disclosure statement in
conspicuous type regarding the status of reserves.
If the association has voted to waive reserves or to use existing reserve funds for purposes other
than purposes for which the reserves were intended, the budget of the association must include
the statement to note that event and to provide notice that the waiving or reserves or the use of
reserves may result in unit owner liability for payment of unanticipated special assessments.
On or after January 1, 2026, if the association is required to perform a reserve study and the
budget of the association does not fund reserves consistent with the reserve study, the budget of
the association must include a statement noting the date of the last reserve study and that the
reserve amount is less than required by the reserve study schedule.
Developer Turnover
The bill amends ss. 718.301(4) and 719.301(4), F.S., to require developers of condominium or
cooperatives to provide the association a copy of the following when the non-developer unit
owners assume control of the association:
A copy of the inspector-prepared summary of the milestone inspection; and
A copy of the most recent reserve study, along with the budget statements regarding the
status required under ss. 718.112(2)(f) and 719.106(1)(j), F.S., if applicable, or a statement in
conspicuous type indicating that the association has not completed the required reserve study
or that the association is not required to perform a reserve study, as applicable.
The bill also amends s. 719.301(4), F.S., to require developers of a cooperative to provide the
association identical documents or statements regarding reserves studies and the status of
reserves to those required for developers of condominiums at the turnover of control to the
nondeveloper unit owners.
113
Sections 718.111(12(b) and 719.104(2)(b), F.S. BILL: PCS/CS/SB 1702 (703878) Page 25
Additional Pre-Sale Disclosures
The bill amends ss. 718.503 and 719.503, F.S., for condominium and cooperative associations,
respectively, which requires certain documents to be provided to prospective buyers of a unit
before closing, and ss. 718.504 and 719.504, F.S., which requires specified disclosures in the
prospectus or offering circular that must be provided to prospective purchasers of a
condominium or cooperative unit, respectively, to require that the following documents or
information be provided to prospective buyers of a unit with a copy of:
A copy of the most recent reserve study along with the budget statements regarding the status
required under ss. 718.112(2)(f) and 719.106(1)(j), F.S., if applicable, or a statement in
conspicuous type indicating that the association has not completed the required reserve study
or that the association is not required to perform a reserve study, as applicable; and
The inspector-prepared summary of the milestone inspection report.
Homeowner Remedies:
The bill amends the definition for the term “dispute” in s. 718.1255(1), F.S., to include a
disagreement between two or more parties that involves the failure of a governing body, when
required by ch. 718, F.S., or an association document, to:
Perform a structural or life safety inspection, including the milestone inspection.
Perform a reserve study.
Fund reserves.
Make or provide necessary maintenance or repairs of association property.
Under the bill, such disputes must be mediated under s. 720.311, F.S., and are not subject to non-
binding arbitration by the division.
The bill also republishes s. 719.1255, F.S., which applies the alternative dispute resolution
provisions for condominium disputes to cooperative disputes to incorporate the amendment to
s. 718.1255, F.S.
Post-Election Certification by Board Members
The bill amends ss. 718.112(2)(d)4.b. and 719.106(1)(d)b., to revise the post-election
certification requirements for condominium and cooperative association board members. Under
the bill, a board member for these associations must certify by affidavit that he or she has read
the declaration of condominium, articles of incorporation, and cooperative proprietary lease, as
applicable, and complete a division-approved education curriculum within one year before, or 90
days after, his or her election or appointment.
Conforming Cross-references
The bill amends ss. 558.002, 718.116, 718.121, 718.706, and 720.3085, F.S., to conform cross-
references.
Effective Date
The bill takes effect July 1, 2022. BILL: PCS/CS/SB 1702 (703878) Page 26
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Under the bill, condominium and cooperative associations and unit owners in those
communities may incur additional expenses related to the required conduct of a milestone
inspection and reserve study. However, the associations and unit owners may benefit
from the long-term financial planning benefits of a reserve study and from the
maintenance or repair of association property.
According to the Florida Building Commission comments in the analysis for SB 1702,
the recertification and building safety inspections currently being conducted in Miami-
Dade and Broward counties can cost as much as $20,000 to $40,000 for the inspection of
a 15 to 20 story condominium, and between $2,000 and $4,000 for the inspection of a
small commercial building. Any remedial work to remedy issues identified during the
inspection would be in addition to these costs.
114
Providers of reserve studies and architects and engineers who offer milestone inspections
may benefit from additional business due to the required milestone inspections and
reserve studies.
114
See Department of Business and Professional Regulation, 2022 Agency Legislative Bill Analysis for SB 1702 at p. 7
(Jan. 7, 2022) (on file with the Senate Regulated Industries Committee). BILL: PCS/CS/SB 1702 (703878) Page 27
C. Government Sector Impact:
The DBPR has not provided a fiscal impact for PCS/CS/SB 1702 (703878). However, the
department has provided fiscal impact analysis for SB 7042, which provides similar
requirements for the inspection of condominium and cooperative building, the
maintenance of building components, and the funding of reserves. For SB 7042, the
DBPR estimates a negative fiscal impact of $1,221,912 for Fiscal Year 2022-2023,
$1,164,771 for Fiscal Year 2023-2024 and Fiscal Year 2024-2025. The estimated fiscal
impact is due to anticipated additional complaints related to the expansion of the types of
building components for which reserves must be maintained.
115
The bill requires
associations to maintain reserves for the building components listed in ss. 718.301(4)(p)
and 719.301(4)(p), F.S., instead of reserves for roof replacement, building painting, and
pavement resurfacing, regardless of the amount of deferred maintenance expense or
replacement cost, and any other item that has a deferred maintenance expense or
replacement cost that exceeds $10,000.
The division’s Long Range Financial Plan requires it to complete investigations within 90
days. Consequently, by requiring more building components to be funded, the division
anticipates more extensive reviews will be required within the 90-day investigation
period.
The division also anticipates the need to contract for services with outside professional to
assist in determining requests to approve alternative funding methods, and to contract
with engineers and architects.
VI. Technical Deficiencies:
None.
VII. Related Issues:
Fannie Mae
116
and the Federal Housing Administration
117
have altered their requirements for
loans secured by condominium and cooperatives in response to the Champlain Towers collapse,
including requiring:
The association to have assessments sufficient to fund any repairs; and
That at least 10 percent of the association’s assessments are dedicated to budget reserves.
Fannie Mae also provides that condominium and cooperatives with significant deferred
maintenance or that have received a directive from a regulatory authority or inspection agency to
make repairs due to unsafe conditions are not eligible for purchase until the repairs are made.
118
115
See Department of Business and Professional Regulation, 2022 Session Fiscal Impact Form, Feb. 17, 2022. (on file with
the Senate Committee on Rules).
116
Fannie Mae, Lender Letter (LL-20221-14), Oct. 12, 2021, available at:
https://singlefamily.fanniemae.com/media/29411/display (last visited Jan. 30, 2022).
117
Freddie Mac, Handbook 4000.1, FHA Single Family Housing Policy Handbook, Condominium Project Approval, sec.
II.C.2.vi., p. 530 available at: https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh-102021.pdf (last visited Jan.
30, 2022).
118
Supra n. 116. BILL: PCS/CS/SB 1702 (703878) Page 28
Although the underwriting standard was adopted before the Champlain Towers South collapse,
Freddie Mac also requires that at least 10 percent of a condominium association’s assessments
are dedicated to budget reserves.
119
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 558.002, 718.121,
718.103, 718.111, 718.112, 718.113, 718.115, 718.1255, 718.301, 718.503, 718.504, 718.706,
719.103, 719.104, 719.106, 719.107, 719.108, 719.1255, 719.301, 719.503, 719.504, and
720.3085.
This bill creates section 553.899 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
PCS/CS/SB 1702 (703878) by Rules on February 23, 2022:
PCS/CS/SB 1702 (703878) changes to the title of the bill from and act relating to
mandatory building inspections to an act relating to building safety. The PCS/CS/SB
1702 (703878) differs from CS/SB 1702 as follows.
Regarding the mandatory milestone inspection requirements in s. 553.899, F.S.,
PCS/CS/SB 1702 (703878):
Changes the inspection requirement from building more than 3 stories in height to
building three stories or more in height;
Clarifies that a milestone inspection is not a firesafety inspection;
Requires associations to deliver an inspector-prepared summary (instead of the full
inspection report) to unit owners by mail or personal delivery, and requires posting
the summary in a conspicuous place, and requires posting of the full report and
summary on the association website, if required to maintain a website;
Revises the inspection requirement to not require the inspection of all habitable and
uninhabitable areas to instead require the inspection of habitable areas; and
Requires the Florida Building Commission to develop comprehensive structural and
life safety standards for maintaining and inspecting buildings and structures in this
state that are three stories or more in height instead of requiring the development of
standards for all building types and structures.
Regarding condominium and cooperative associations under chs. 718 and 719, F.S.,
respectively, The PCS/CS/SB 1702 (703878) also:
Amends ss. 718.111(12) and 719.104(2), F.S., to requires associations to maintain, as
official records, copies of the milestone inspection report and other inspection reports
119
Freddie Mac, Established Condominium Projects, April 3, 2021, available at:
https://guide.freddiemac.com/app/guide/section/5701.5 (last visited Jan. 30, 2022). BILL: PCS/CS/SB 1702 (703878) Page 29
relating to a structural or life safety inspection for 15 years, and copies of reserve
studies and reserve funding plans;
Amends ss. 718.103 and 719.103, F.S., to define the term “alternative funding
method;”
Amends s. 719.104, F.S., to revise the maintenance obligations for cooperative
associations;
Amends ss. 718.112 and 719.106, F.S., to revise the requirements for association
budgets, including requirements for reserve studies, the waiving of reserves, the
funding of reserves, and budget notices;
Amends ss. 718.112(2)(d)4.b. and 719.106(1)(d)b., F.S., to revise the post-election
certification for condominium and cooperative association board members;
Amends s. 718.113, F.S., to revise the maintenance obligations for condominium
associations;
Amends ss. 718.115 and 719.107, F.S., to authorize associations to adopt a special
assessment or borrow money without owner approval for the necessary repair,
maintenance, or replacement of condominium or cooperative property;
Amends s. 718.1255, F.S., to include disputes related to reserve studies, reserves, and
inspections in the presuit mediation requirements for condominium associations;
Reenacts s. 719.1255, F.S., relating to alternative dispute resolution, to incorporate
the amendment made to s. 718.1255, F.S;
Amends ss. 718.301 and 719.301, F.S., to revise the requirements for the records a
developer must provide to the association at turnover of control to the nondeveloper
unit owners;
Amends ss. 718.503 and 719.503, F.S., to delete notices acknowledging receipt of the
milestone inspection report in the bill, and to instead require the unit owner to deliver
to a prospective buyer or lessee a statement regarding the status of reserve funding in
the budget, a copy of the most recent reserve study, and the milestone inspection
report summary, if applicable;
Amends ss. 719.504 and 719.504, F.S., to revise the requirements for prospectuses
and offering circulars; and
Amends ss. 558.002, 718.116, 718.121, 718.706, and 720.3085, F.S., to conform
cross-references.
CS by Regulated Industries on February 1, 2022:
The committee substitute requires that the inspector in charge of a phase two milestone
inspection must be a licensed engineer or licensed architect with a minimum of five
years’ experience designing structural components and five years’ experience inspecting
existing buildings of similar size, scope, and type of construction.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.