Nearly a million condo owners in Florida face a major deadline at the end of the year. It was then that a law was passed in 2022 requires most Florida condominium associations submit inspection reports for their buildings and collect money from owners to pay for necessary repairs.

Condominium owners report new condominium rules are increase costs and generate scandalous evaluations.

The media took up the indignation. Condo Owner News Articles »facing financial turmoil due to new building safety regulations“and how”bills cripple owners” leads readers to believe that Florida lawmakers have imposed a huge tax on seniors and those on fixed incomes.

This is misleading at best.

As research director at the University of Florida Bergstrom Real Estate CenterI suggest that it is important to put emotions aside and see what these laws are trying to accomplish.

Safety inspections

The National Condominium Law of 2022, known as the SB-4Dand its 2023 follow-up, SB-154establish three main requirements: authorized inspections, reporting and disclosures, and reserve funds.

It is important to note that these laws are not tax laws that directly increase housing costs for condo owners.

But by requiring more inspections, transparency and funding to cover repairs, many homeowners will face costs far higher than the amounts paid in the past. These new expenses simply more closely reflect the true cost of living in a condo near the ocean.

Under the laws, all buildings occupied before 1992 must undergo a milestone inspection by December 31, 2024. This is an examination of the structural integrity of the building by an architect or engineer .

This requirement also applies to buildings at least 25 years old located within 3 miles of the coast.

If inspection of the milestones reveals a potential structural problem, testing is necessary to determine if structural repairs are necessary. If this is the case, the owners must finance these repairs without the possibility of waiving them by vote.

If no harm is identified, the association must then report and publish the results, thereby concluding the requirement.

Prior to SB-4D, milestone inspections were not required outside of Miami Dade And Broward Counties. Now, they are mandatory statewide and must be reported to local officials, all unit owners and the public for buyer information.

Sufficient savings for repairs

The new regulations also require building associations to budget and collect sufficient reserves to cover the costs of maintaining and replacing parts of their buildings subject to regular wear and tear, such as roofs, elevators and balconies.

History suggests that most homeowners’ associations struggle to save enough for repairs and maintenance to keep their properties safe and in pristine condition.

“Florida has… more associations considered weak (in terms of funded reserves) than any other state,” Will Simons, manager of Florida and Southeast operations at Association reserveswhich carries out reserve studies for condominium and community associations, told a colleague as part of a research article.

The Champlain Towers South condominium which collapsed in the Miami suburb of Surfside in June 2021, killing 98 peopleis just an example. Simons’ company conducted a reserve study of the condo just months before the collapse and discovered that his association was significantly underfunded.

The association held approximately US$706,000 in reserves in January 2021. The association’s reserves recommended that the association stockpile nearly $10.3 million to account for necessary repairs. That means the Surfside condo owners association only had 6.9 percent of the money it needed.

The Real Cost of Living by the Ocean

More than 16,000 condominium associations representing more than 900,000 of Florida’s 1.5 million condominium units are currently affected by the new laws because those units are already more than 30 years old.

Properties that have been sufficiently maintained and hold adequate reserves for future structural repairs will only face increased disclosure of inspection reports and continued reserve funding.

Many residents, especially retirees, have difficulty adjusting to financing requirements. In response, Governor Ron DeSantis indicates some form of relief for owners facing financial difficulties due to these regulations.

The frustration is understandable, as current residents are simultaneously being asked to finance 30 years of past deterioration and also set aside their savings for the next 30 years. However, policymakers are simply establishing guidelines that condo owners should have established themselves. Properties facing significant financial shocks due to SB-4D are, by definition, undermaintained or underfunded.

It is important to distinguish the intent of these laws from the possibility of overreaction or fraud by condominium associations, which is an existing concern. House Bill 1021enacted in June 2024, focuses on the governance of associations to manage this type of surveillance.

Concrete structures, roofs, windows and seaside elevators have a limited lifespan. These items must be repaired or replaced to ensure the safety of residents. The new regulations make true condo costs transparent to owners and unit buyers.