ANOTHER STUNNING GRAND JURY REPORT ABOUT FLORIDA CONDOMINIUMS

I’ll tell you something – I give a lot of credit to Kathy Fernandez Rundle, The State Attorney for Miami-Dade County. She actually prosecutes cases of condo fraud, years ago she assembled a grand jury to make recommendations to the state legislature regarding condo crimes, kickbacks, conflicts of interest and the grand jury’s findings turned into legislation ———- and now, in light of the tragedy in Surfise at The Champlain Towers collapse where 98 innocent people lost their lives —– she assembled another fact finding grand jury, this time to investigate the laws regarding inspections of our buildings and how we waive reserve funds.

The last Miami Dade Grand Jury wrote a scathing report regarding condo crime, saying it was rampant — and people get on the board just to divert the condo’s business to their relatives or even their own companies. Well, this Grand Jury pulled no punches either.

As you know, the current law allows all condos the opportunity to waive the full funding of reserve accounts for major repairs or replacements. All it takes is a lousy vote of a majority of a quorum of the owners who attend a meeting. So, if in your 100 unit condo, a quorum of owners is typically 50 or less. So, if 50 or more people show up either in person or by proxy, a majority of them can change the budget to completely exclude reserves, and as we know it’s typically done year after year after year.

Here is what the Grand Jury said about that:

“We Are At A Loss To Understand Why Such Language Would Even Be Included In The Florida Condominium Act.” They eventually said that at a minimum, it should at least require a 70% vote of the owners to waive reserves. So, you can rest assured that this one finding by the grand jury will work its way into new condo legislation in the next 2 months as the Florida Legislature is now in session. It’s going to become real difficult real soon, to completely refuse to fund your reserve account. Surprisingly, the grand jury didn’t say a word about requiring properly licensed personnel to do the reserve account analysis each year, instead of joe the butcher, fred the cab driver and joan the teacher, each of whom are not qualified to do the reserve analysis.

In terms of the 40 year certification process for Dade and Broward, The Grand Jury recommended that buildings should be given a 2 year advanced notice to perform the 40 year inspection. And of course 40 years is way too long for the first inspection. The first inspection and certification should be 10 – 15 years after the building is constructed , and the condominium inspection should be updated every 10 years. I think you can rest assured that The Florida Legislature will probably make this a law throughout the state, not only in d\Dade and Broward counties. In fact, a bill has already been filed in the senate that would require the inspection of all condos in the state over 3 stories, after 30 years and every ten years thereafter.

As the law stands right now in Dade and Broward —- for the 40 year certification — the inspection only involves the structural and electrical issues. Well, you can throw that right out the window according to this grand jury. going forward,
The Grand Jury recommends that all of the following components must pass inspection:

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, drainage systems, painting, irrigation systems. This is a much more comprehensive and much more expensive inspection report than what we have now. Condos better get ready to put these costs into their budgets if this legislation passes.

Even the qualifications of the people doing the certifying would change. The Grand Jury wants any engineer certifying a building in connection with an inspection —— must have previously designed and inspected at least 3 buildings of the same or greater height as the building to which is to be recertified.

The Grand Jury opined that building officials must require proof of waterproofing and painting every 10 years. They specifically found that ” a failure of condo boards to implement much needed repairs and maintenance has led to unsafe building structures throughout South Florida. They reminded everyone that associations who don’t comply with the insurance company’s requirement of routine maintenance may result in a denial of the claim.”

They even recommended that building officials should check to see if the condominium is performing routine maintenance and condo boards should be required to file a document certifying that regular routine maintenance has been conducted in the last 12 months.

And thankfully, The Grand Jury believes that the education requirement for board members be expanded. As you know , I drafted Senate Bill 394 filed by Anna Maria Rodriguez and House Bill 547 filed by representative David Borerro, The bill would require board members to get certified by taking an educational class rather than getting certified by signing a silly form. Florida would be the first state in the country to require that. That would be my legacy and I have my fingers crossed.

All I can say is……when you factor in the insane rise in the price of insurance, and the changes we know are coming in this legislative session, it’s about to get a lot more expensive to live in your condominium. Get ready to buckle up and hold on. It’s going to be a bumpy ride.

To view the actual Grand Jury report click here.

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