Florida lawmakers have passed House Bill 913, which updates condominium laws to provide financial relief while maintaining building safety. This legislation is a response to challenges faced by condominium owners after stricter safety rules were introduced following the 2021 collapse of Champlain Towers South in Surfside.
The new bill extends important deadlines and offers financial flexibility while keeping safety a priority. These changes are expected to help owners, many of whom were struggling with large assessments and rising costs.
What is a Milestone Inspection?
A milestone inspection is a structural inspection required for older buildings to ensure they are safe and sound. It is intended to identify substantial structural deterioration. This inspection applies to buildings that are at least three stories high and older than 30 years (or 25 years if near the coast). The first milestone inspection must be performed by December 31 of the year in which the building reaches the required age, and then every 10 years afterward.
What is a Structural Integrity Reserve Study (SIRS)?
A Structural Integrity Reserve Study is a financial study to determine how much money a condominium association needs to save for future major repairs related to structural and safety issues. The study covers items like roofs, exterior walls, plumbing, electrical systems, windows, doors, and other elements that cost more than $25,000 to replace. This study ensures associations are reserving enough funds to perform necessary repairs without placing sudden, large assessments on owners.
Key changes under House Bill 913:
• The deadline for the Structural Integrity Reserve Study is extended by one year, giving
associations until December 31, 2025, to comply.
• Milestone inspections and Structural Integrity Reserve Studies are now required for
buildings with three or more habitable stories, rather than the previously vague
language of “three stories or more.”
• Condominium associations can pause funding reserves for up to two years following
the completion of a milestone inspection. This gives owners temporary financial relief
after expensive inspections and repairs.
• Associations are allowed to use loans or lines of credit to meet their reserve funding
obligations if the majority of owners approve this option.
• Professionals conducting milestone inspections or Structural Integrity Reserve Studies
must disclose any plans to bid on repair work, helping avoid conflicts of interest.
• The minimum repair cost threshold for reserve studies was raised from $10,000 to
$25,000, reducing the number of small items that must be included.
• Local governments must report to the state by October 1 about milestone inspections
and buildings deemed unsafe or uninhabitable.
• Condominium associations are required to post certain records online, and electronic
voting can be implemented if 25 percent of owners request it.
How this may affect condominium loans:
Lenders typically assess the financial health of condominium associations when considering loans or mortgages for buyers. If a condominium building is not in compliance with state safety laws, including milestone inspections or reserve funding requirements, lenders may view this as a risk. This could lead to:
• Denial of mortgage loans for buyers in non-compliant condominiums.
• Higher interest rates or stricter loan conditions.
• Refusal to issue loans for buildings deemed unsafe or uninhabitable.
On the positive side, the extension of deadlines and allowance for temporary reserve pauses may help some associations remain compliant and avoid being classified as risky. However, lenders will likely closely monitor compliance with milestone inspections and Structural Integrity Reserve Studies moving forward, as failure to meet these requirements will still negatively affect financing options.
In summary, Florida’s new condominium law aims to ease the financial burden on owners while continuing to require inspections and reserve funding to ensure buildings remain safe. Buyers and owners should continue to be cautious, as non-compliant buildings may face financing challenges.
Liz Dawes, eXp Realty
