THE BIG CHANGE: NO LONGER IS THERE THE ABILITY TO WAIVE RESERVES OR USE THEM FOR OTHER PURPOSES
Effective December 31, 2024, a unit-owner controlled association may not determine to provide no reserves or reserves less adequate than required by the items listed in the mandatory structural integrity reserve study we showed you last week. THAT’S IT – starting on January 1st, 2025 your budget must contain fully funded reserves and YOU CANNOT WAIVE RESERVES ANY LONGER FOR ALL OF THE MAJOR COMPONENTS OF THE CONDOMINIUM BUILDING THAT WE SPOKE ABOUT LAST WEEK.
THE SAME APPLIES TO A DEVELOPER CONTROLLED CONDOMINIUM:
Before turnover of control of an association by a developer to unit owners other than a developer under 718.301, the developer-controlled association developer may not vote the voting interests allocated to its units to waive the reserves or reduce the funding of the reserves.
CAN YOU STILL BORROW FROM ONE CATEGORY OF RESERVES TO COVER A SHORT FALL IN THE OTHER?
No. You cannot borrow from one reserve category to pay for repairs needed in another category. Effective December 31, 2024, members of a unit-owner controlled association may not vote to use reserve funds, or any interest accruing thereon, that are reserved for items listed in the structural integrity reserve study, for any other purpose other than their intended purpose
Remember that in addition to everything listed above, we have the upcoming deadline for high rise condominiums that are 75 feet or more in height, to install either a fire sprinkler system or an engineered life safety system. For those condominiums that have already installed a sprinkler system or engineered life safety system, you’re OK and have nothing to worry about. However, in your condominium, even if the owners voted to forego the installation of sprinklers, STARTING ON JANUARY 1, 2024 YOUR LOCAL BUILDING OFFICIAL CAN AND WILL FORCE YOUR ASSOCIATION TO HAVE AN ENGINEERED LIFE SAFETY SYSTEM. THE BOTTOM LINE IS THAT ONE OR THE OTHER IS REQUIRED.
There are many many many high-rise condominiums throughout the state that voted to opt out of sprinklers, thinking that the fire safety issue is in the rear view mirror. They were wrong. An engineered life safety system is still required. The bottom line is that by January 1st, 2024 you better either have sprinklers or an engineered life safety system. .
By January 1st, 2024 if you live in a high rise condominium of basically 6 stories or more, you will be required to have either an engineered life safety system or a fire alarm system. Again, the potential for a seven figure cost to the owners.
By December 31st, 2024, condominium owners get hit with mandatory Phase One and Phase Two inspections by an architect or engineer if your building’s age is at least 30 years old, and every ten years thereafter. 25 years if on the coast. Just the cost of these inspections will be expensive.
Then we are talking about being forced to make the repairs required in The Phase One and Phase Two Inspection Reports. Depending on the size, age and amount of damage — this could be several million dollars. For example, The Champlain Towers in Surfside needed 15 million dollars in repairs at the time of its devastating collapse.
Then, by December 31st, 2024 your condominium needs to pay for a structural reserve study, by a Florida architect or engineer. That won’t be cheap.
Then, starting January 1st, 2025 your condo’s budget must include fully funded reserve accounts as determined by that architect or engineer. And you cannot waive the funding of these reserves.
If it all sounds scary it’s only because it is scary for those condos that never saved for a rainy day. Your bill has now come due.