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Webinar | Dollars and Sense | Milestone Inspections & Structural Integrity Reserve Studies

Dollars and Sense | Milestone Inspections & Structural Integrity Reserve Studies

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Recorded while presented live on March 21, 2023.

Milestone Inspections and Structural Integrity Reserve Studies (SIRS) | Senate Bill 4-D…What’s Next: Today’s Requirements vs. Proposed Legislation. Our panel of experts and professionals answered your questions concerning the new condo reserve laws, proposed legislation, responsibilities and roles of those involved.

This webinar does not satisfy any requirements for manangers or board members, nor should it be considered legal advice.

(Written by Jeffrey Rembaum and reprinted with permission from the March 2023 edition of the “Florida Community Association Journal”.)

New Legislation Needed for Required Maintenance Affecting Condominium Building Structural Integrity and Safety

New Legislation Needed for Required Maintenance Affecting Condominium Building Structural Integrity and Safety


Material Alterations, Special Assessments, and Borrowing

As to the title of this article, anyone familiar with Senate Bill 4-D and the newly required milestone inspection reports and structural integrity reserve studies primarily applicable to condominium and cooperative buildings three stories and higher knows that material alterations, special assessments, and the authority to borrow funds are not mentioned in the legislation. So why write this article about those subjects? Because the milestone reports and structural integrity reserve studies will no doubt also lead to both expected and unexpected required repairs and replacements. In effectuating such repairs and replacements, an association’s board of directors needs i) the ability to approve material alterations under certain circumstances that sometimes arise in connection with such work, ii) the ability to levy special assessments to pay for the work, and iii) the authority to borrow money that is often needed to pay for such repairs and replacements so that the special assessment payments can be amortized over time, thereby lessening the financial strain on the owners.

     In the event the needed repairs and replacements require material alterations to the condominium common elements or cooperative property, an important question that arises is, is the approval of the members required? The relied-upon definition of what constitutes a “material alteration” comes from Sterling Village Condominium Inc. v. Breitenbach, 251 So. 2d 685 (Fla. 4th DCA 1971). It means to “palpably or perceptively vary or change the form, shape, elements, or specifications of the common elements in such a manner as to appreciably affect or influence its function, use, or appearance.”

Let’s first examine the relevant legislation concerning material alterations. As to condominium associations, §718.113, Fla. Stat., provides, in relevant part, that

Maintenance of the common elements is the responsibility of the association… Except as otherwise provided in this section, there shall be no material alteration or substantial additions to the common elements or to real property, which is association property, except in a manner provided in the declaration as originally recorded or as amended under the procedures provided therein. If the declaration as originally recorded or as amended under the procedures provided therein does not specify the procedure for approval of material alterations or substantial additions, 75 percent of the total voting interests of the association must approve the alterations or additions before the material alterations or substantial additions are commenced….

As to cooperative associations, §719.1055, Fla. Stat., provides in relevant part that

unless a lower number is provided in the cooperative documents or unless such action is expressly prohibited by the articles of incorporation or bylaws of the cooperative, … material alterations or substantial additions to such property by the association shall not be deemed to constitute a material alteration or modification of the appurtenances to the unit if such action is approved by two-thirds of the total voting interests of the cooperative. [emphasis added]

With all of this in mind, what if the required repairs stemming from the milestone report or structural integrity reserve study include necessary (meaning not voluntary) material alterations? If the governing documents do not vest such decision making to the board of directors, which is relatively rare, is the vote of the membership required? The short answer is that it depends on the facts and circumstances at hand. It is patently clear that merely because the replacement product is less expensive than replacing the item with the same product, that does not justify obviating the membership vote when required. See George v. Beach Club Villas Condominium Assoc., 833 So. 2d 816 (Fla. 3rd DCA 2002). For example, replacing a cedar shake roof with asphalt shingles due to cost considerations is not a sufficient reason to not obtain membership approval when otherwise required.

However, under the right circumstances the board can rely on the “necessary maintenance exception,” which evolved from a series of cases further discussed below. Before explaining further, the board should always consult with the association’s legal counsel to ensure a concurrence of opinion before proceeding with the work based on this “necessary maintenance exception” legal theory. There is a balance in the analysis which must be undertaken in that the association is responsible for the maintenance of the common elements as compared against when such maintenance may require a vote of the membership due to a material alteration. Based on the “necessary maintenance exception,” when it is clear that the material alteration is needed to complete the required maintenance, the board likely has the authority to proceed with the work without membership approval. Therefore, in our view, it would be beneficial for the legislature to codify this extremely important “necessary maintenance exception” into the Florida Statutes.

Regarding material alterations, in Tiffany Plaza Condominium Association, Inc. v. Spencer, 416 So. 2d 823 (Fla. 2nd DCA 1982), without the required vote of the owners, the board of directors opted to construct a rock revetment wall in the sand between the condominium’s seawall and the mean high-tide line. The area in question was part of the association’s common elements. Owners who were unhappy with the decision of the board (including the assessment to fund this project) sued the association. The association defended itself on the basis that the rock revetment was not an alteration or improvement of a common element but rather was part of the required maintenance, repair, and replacement of a common element that the association had responsibility for under several provisions of the declaration, its bylaws, and statutes. While the trial court agreed with the plaintiff owners, the Second District Court of Appeal reversed the trial court decisions and held that

If, in the good business judgment of the association, such alteration or improvement is necessary or beneficial in the maintenance, repair, or replacement of the common elements, all unit owners should equally bear the costs as provided in the declaration, bylaws, and statutes.

Further, the court held that

from the cited provisions of the declaration, it is clear to us that the association could properly assess all unit owners for the replacement or repair of the beachfront common element if it was damaged by erosion or otherwise. Likewise, it seems to us that if, in the good business judgment of the association, alteration or improvement of the beachfront by addition of a rock revetment would protect the beach from damage and the necessity of subsequent repair or replacement then that cost should also be borne equally by all unit owners.

In Ralph v. Envoy Point Condominium Association, Inc., 455 So. 2d 454 (Fla. 2d DCA, 1984), condominium owners objected to an assessment passed by the board of directors for the purpose of constructing a vertical seawall extension. The court held that, in view of the competent evidence from which it could be determined that the vertical extension of the seawall was necessary to protect the common elements, the board of directors of the condominium association was authorized to construct the extension without the necessity of the vote of the condominium unit owners, which was required by the condominium documents for alterations or improvements.

Regarding special assessments, in yet another case, Cottrell v. Thornton, 449 So. 2d 1291 (Fla. 2d DCA, 1984), condominium owners brought suit against the president of a board of directors of a condominium association after the board assessed the members to pay for the cost of fixing problems with a canal system, roadway, and swimming pool. The court examined the authority of the board to make decisions when a vote of the members would otherwise be required. It is clear from reading this case that the court received evidence regarding the condition of the canals which were filling due to erosion, excess weed growth, and pollution from excess runoff; that lots were gradually crumbling away into the canals; that the swimming pool was built on soil which was not de-mucked prior to construction and then floated up; and there were cracks on the floor and side walls of the pool and its deck. In fact, the pool was closed to any type of pedestrian traffic due to the unsafe conditions. The roadways had large and severe potholes. There was testimony during the proceedings that the canal needed to be drained, scraped, de-mucked, and lined with sea bags to make the seawalls secure and that the roads needed to be resurfaced.

After the board put its plan into action and levied the assessment, the plaintiffs who sued claimed the repairs constituted material alterations of the common elements. The president of the board argued that only necessary repairs and replacements were authorized by the board. The issue presented on appeal was whether the proposed changes constituted substantial additions/alterations or were necessary repairs. Here, the appellate court relied on the findings of the trial court which found that

because necessary repairs were planned, not material alterations, the trial court found the board of directors was authorized to make assessments against the unit owners without holding a vote.

The trial court also held that the restoration was “necessary to prevent further damage to the common elements,” and, as such, the board had the authority to proceed without a vote of the owners. This ruling is in line with the “necessary maintenance” principle previously provided in the above-referenced cases.

It is extremely important when examining whether a vote of the membership is required to perform material alterations that each project be separated into its core constituent components so as to avoid an argument that a particular part of the project was in fact a material alteration requiring a vote of the membership. If part of a concrete restoration project included material alterations which were unavoidable under the circumstances, but a part of the project also included voluntary aesthetic changes, those aesthetic changes would likely require approval of the membership (subject, of course, to the provisions in the governing documents or relevant legislation) even though the other part of the project did not.

In Bailey v. Shelbourne Ocean Beach Hotel Condominium Association, Inc., et al., 307 So. 3d 74 (Fla. 3rd DCA 2020), the board of directors levied special assessments to the tune of 30 million dollars for two rounds of construction projects. The first round of construction included elevator modernization; exterior painting; repairs to the porte cochere, pool and lobby; installation of a sewage lift station; and installation of impact-resistant balcony doors. The second round of construction included window repairs, installation of safety railing, replacement of unit doors, pool paver repairs, hardening of the beach entrance, and reinforcement of the substructure beneath the townhomes.  Several condominium unit owners argued, among other things, that the association violated Chapter 718 F.S. by its failure to secure unit owner approval for the construction projects that amounted to a material alteration of the common elements and that a prior vote of the membership regarding a material alteration is required. The court held that regarding two particular parts of the project, the board of directors violated the Statute when it assessed unit owners for the cost of material alterations based on 75 percent  of unit owners ratifying the construction projects after completion because §718.113(2)(a), Fla. Stat., requires approval before beginning construction. The court further held that although the majority of items completed during construction constituted necessary maintenance, and thus were properly assessed by the board, there was a genuine issue of material fact as to whether pool pavers and reinforcement of substructure underneath the townhomes were necessary maintenance items.

As to a board’s authority to borrow money to fund necessary repairs or replacements, there is no Florida case law or other legal authority that directly stands for the proposition that a board of directors can borrow such funds when the governing documents would otherwise require a vote of the membership to do so. Therefore, this, too should be addressed in a future legislative bill.

A board should never consider relying on the theories of the aforementioned cases without first consulting with its legal counsel regarding the applicability of those cases to the facts at hand and to better understand the risks involved.

With all of this in mind, it would be extremely helpful for additional legislation to be adopted by the Florida legislature that clearly

    1. permits the association through board action alone to authorize material alterations as part of any necessary repair or replacement project when similar like-kind items are no longer available or not recommended due to safety etc.; and
    2. permits the association through board action alone to special assess the membership as part of any necessary repair or replacement project; and
    3. permits the association through board action alone to borrow money in connection with any necessary repair or replacement project.

(Reprinted with permission from the January 2023 edition of the “Florida Community Association Journal”.)

News from CAI | Condo Safety Legislation Passed in Special Session

News from Community Associations Institute: Condo Safety Legislation Passed in the Special Session


Per a May 26, 2022 email we received from CAI: This week the Florida legislature was in special session and condominium safety was one of three initiatives addressed. CAI Florida Legislative Alliance is pleased to announce that SB 4D – Building Safety Act for condominium and cooperative associations passed unanimously through both the House and Senate on May 24th and 25th respectively, after a powerful and heartfelt appreciation for the sponsors, Sen. Jennifer Bradley (R-5), Senator Jason Pizzo (D-38) and Rep. Daniel Perez (R-116) was expressed by Members in both the House and Senate. Governor DeSantis signed the bill on May 26th. This bipartisan legislation is the result of tireless advocacy by you, our membership; thanks to your determination, CAI Florida Legislative Alliance was able to work with legislators in both chambers to craft an effective condo safety bill that will protect Floridians. CAI representatives were in Tallahassee this week during the legislature’s special session and were the only ones to speak on behalf of the new bill.

The legislation includes a framework largely based on CAI public policy recommendations for:

  • Building inspections as structures reach 30 years old and every 10 years thereafter.
  • Mandatory reserve study and funding for structural integrity components (building, floors, windows, plumbing, electrical, etc.).
  • Removal of opt-out funding of reserves for structural integrity components.
  • Mandatory transparency—providing all owners and residents access to building safety information.
  • Clear developer requirements for building inspections, structural integrity reserve study, and funding requirements prior to transition to the residents.
  • Engagement of the Florida Department of Business and Professional Regulation and local municipalities to track condominium buildings and the inspection reporting.

Associations will have two years to comply with these requirements. CAI will be working closely with policymakers before the bill takes effect in 2024 to be certain the new requirements and directives are workable and practical for Florida’s impacted associations.

Since June 24, 2021, the tragic collapse of Champlain Towers South where 98 people perished and many others lost their homes, CAI mourned, prayed, and committed to doing whatever we could to make sure this never happened again. Following the collapse, CAI members and volunteers worked closely with Florida Sens. Jennifer Bradley and Jason Pizzo, as well as Rep. Daniel Perez to lead the efforts to pass this important legislation.

The comprehensive legislation makes certain that no matter in what county a condominium or cooperative is located, they will be periodically inspected with information shared with unit owners, local building officials, and prospective buyers. CAI will continue working with policymakers to make certain that associations have the time to meet these changes and that these new processes are practically workable for associations while making certain they are fiscally sound and physically safe.

CAI Florida Legislative Alliance

Can You Repeat That? Is Your Condominium in Compliance?

Can You Repeat That? Is Your Condominium in Compliance?


If your condominium is greater than 75 feet tall, then you need to read this article.

It is essential for condominium associations to ensure that their buildings are in compliance with the requirements of the Florida Fire Prevention Code (the “Fire Code”). For the safety of all residents, associations must ensure they stay up to date with the latest and greatest in fire safety provisions. One of these essential safety features is a requirement that systems be built into new and existing buildings to ensure that first responders’ radios will work throughout buildings in an emergency situation. Pursuant to Section 11.10.1 of the Fire Code, “in all new and existing buildings, minimum radio signal strength for fire department communications shall be maintained at a level determined by the AJH [the authority having jurisdiction]. Additionally, Section 11.10.2. provides that where required by the authority having jurisdiction, two-way radio communication enhancement systems must comply with the requirements of the Fire Code.

When originally adopted, the requirements of Sections 11.10.1 and 11.10.2 of the Fire Code applied only to new buildings, so the requirement was not a burden on existing buildings. However, in 2013, the Fire Code was updated as set out above to provide that all new and existing buildings must maintain adequate fire department radio signal strength inside the building. This new requirement applied to all buildings and did not provide a grace period. This posed a significant problem for many high-rise condominiums, as the installation of the necessary equipment involves opening walls and ceilings and can be quite costly to the association. The cost of such installation was a substantial burden to condominiums, not expecting to be required to install same, and therefore never budgeted for the installation.

Recognizing the problem, in 2016 the Florida Legislature adopted section 633.202(18), Florida Statutes, which provided a grace period for high-rise buildings. Existing high-rise buildings were not required to comply with minimum radio strength for fire department communications until January 1, 2022. You may be thinking, “that date is passed”, but do not panic. If your condominium has not yet complied with the requirements, have no fear. The 2021 Florida Legislature amended section 633.202(18), Florida Statutes, to provide another extension for compliance.

In accordance with the newly amended statute, existing high-rise buildings now have until January 1, 2025 to come into compliance with the requirements. However, the association must apply for an appropriate permit for the required installation by January 1, 2024. More specifically, section 633.202(18), Florida Statutes, is amended to provide, in pertinent part, that:

(18) The authority having jurisdiction shall determine the minimum radio signal strength for fire department communications in all new high-rise and existing high-rise buildings. Existing buildings are not required to comply with minimum radio strength for fire department communications and two-way radio system enhancement communications as required by the Florida Fire Prevention Code until January 1, 2025. However, by January 1, 2024, an existing building that is not in compliance with the requirements for minimum radio strength for fire department communications must apply for an appropriate permit for the required installation with the local government agency having jurisdiction and must demonstrate that the building will become compliance by January 1, 2025. Existing apartment buildings are not required to comply until January 1, 2025…

Therefore, all existing high-rise buildings must come into compliance by January 1, 2025. It is important to note that this time extension applies only to high-rise buildings. By way of over simplification, it does not apply to buildings less than 75 feet tall (the measurement can be tricky, so if your building is close to 75 feet check with your association attorney regarding this measurement). In 2018, the Florida Department of Financial Services, Division of State Fire Marshal issued a Declaratory Statement finding that section 633.202(18), Florida Statutes does not apply to the enforcement of Section 11.10 of the Fire Code to buildings under 75 feet in height. Therefore, if your building is greater than 75 feet in height, it is required to comply with the radio signal strength required by the authority having jurisdiction at this time.

In light of the foregoing, it is essential that your association take action to determine whether sufficient fire department radio signal exists in your building. We recommend the association reach out to the local fire code official to determine the exact requirements for your jurisdiction. If sufficient signal does not exist in your building, it is essential to prepare a plan (including design, permits, financing, etc.) to ensure that your building will comply by the deadline of January 1, 2025.

Follow-up | All 2022 Champlain Towers-Inspired Bills Fail – Perfect Opportunities Lost

All 2022 Champlain Towers-Inspired Bills Fail: Perfect Opportunities Lost


As a result of the 2022 Florida legislative session, there will be no new statutes requiring mandated building/engineering inspections, no statutory changes to budgeting procedures, no mandated reserve study requirements, and no statutory changes to required disclosures. On March 11, reporters Jon Schuppe and Phil Prazan, of NBC 6 South Florida, reported,

Negotiations between the Florida Senate and House of Representatives, both controlled by Republicans, broke down, with the two sides unable to agree on a bill that would require inspections of aging condo buildings and mandate that condo boards conduct studies to determine how much they need to set aside for repairs. The talks were undone by a disagreement over how much flexibility to give condo owners in the funding of those reserves.

However, the failure of the legislation does not mean a board of directors can ignore their fiduciary duties and obligations. While only two Florida counties have mandated, in their code of ordinances, that older condominium buildings have life-safety inspections, (Miami–Dade and Broward counties as well as a couple of cities), that does not mean required maintenance and proper planning can be otherwise avoided. Board members must exercise their fiduciary duties with due care and due diligence. Depending upon the age of your condominium building, voluntary engineering inspections and professional reserve studies should already be taking place on a regular schedule. Capital repair and replacement projects should already be a part of the association’s planning processes.

As explained by board certified specialist in condominium and planned development law attorney Lisa Magill,

Is the law the only reason you stop at a red light? Probably not. You stop because there’s a likelihood a truck will smash into you from the side [if you do not].

In other words, common sense should prevail. All condominium unit owners know that one day the roof, air conditioners, and water and cooling towers will need to be replaced; the building will need to be repainted to ensure a watertight seal remains intact; the pool will need re-surfacing; and the parking areas and asphalt will need attention, too. Perhaps one of the most expensive repairs, which is rarely discussed, let alone planned for and budgeted in advance, and that even the Florida Statutes do not specifically mention by name, is concrete restoration, with repair costs potentially reaching into the millions of dollars depending on the extent of the repairs. But, such repairs are a given. It is not a matter of “if” but rather only a matter of “when” these repairs will be required.

The only way to avoid a revolt of the membership when explaining the upcoming multi-million dollar assessment is to lessen the blow by having some, if not all, of the needed monies already saved in a reserve account. Section 718.112(1)(f)(2)(a), Florida Statutes, provides that,

[i]n addition to annual operating expenses, the budget must include reserve accounts for capital expenditures and deferred maintenance. These 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 estimated remaining useful life and estimated replacement cost or deferred maintenance expense of each reserve item. The association may adjust replacement reserve assessments annually to take into account any changes in estimates or extension of the useful life of a reserve item caused by deferred maintenance.”

While a majority of a quorum of the membership can vote to waive or reduce reserves, this can only occur if the board of directors provides the membership such opportunity. For example, when voting to reduce reserves, the percentage by which the required reserves can be reduced is decided in advance by the board and then presented to the membership for the vote. In light of the Champlain Towers South disaster, boards of directors should put considerable thought into these decisions.

On March 12, Ann Geggis of Florida Politics reported that

the Legislature’s inability to pass any legislation updating condo regulations in the wake of last summer’s disaster that killed 98 people stunned observers…For this Session, nine bills sought to change rules regarding condominium associations…An estimated two million people live in 912,000 Florida condo units that are 30-years or older. Another 131,773 units are 20 to 30 years old, according to the Florida Engineering Society & American Council of Engineering Companies of Florida….The executive director of the engineering society and council called the failure to pass any legislation this year a ‘missed opportunity,’ according to a news release.

Never has the term “sausage factory” been more appropriate to describe the 2022 team of Florida legislators who failed to pass meaningful legislation that could have helped thwart another Champlain Towers South disaster. But, just because the legislature failed in doing so (for this year), that does not mean, as a board member, that you will fail, too. Make a commitment to your condominium community to plan for the future. Adopt a board resolution, or even amend the condominium declaration, to have required building inspections and reserve studies. In addition, if your association is waiving reserves year after year, stop it and start saving for the future. You will be glad you did.