Article Courtesy of WUSF

By Gabriella Pinos

Published  September 21, 2024

Lopez said there isn’t enough data to have a special session on condos before the end of 2024.

Last Monday, Gov. Ron DeSantis called on lawmakers to do something before the 2025 legislative session to address the crisis facing condominium owners. But Florida Rep. Vicki Lopez doesn’t feel the pressure of convening a special session on condos before the end of the calendar year.

Lopez discussed condo reforms with Tom Hudson on The Florida Roundup.
 

“If I was called back into special session, I would then have to start guessing,” Lopez said. “I would have to say, well, if this is the case, what would a good reform be? So I wouldn't be able to have the benefit of any data, but I can certainly try to reform based on what I think I'm hearing, the anecdotal stories.”

Lopez said not enough condo buildings have completed their structural integrity reserve studies, which Florida law defines as “a study of the reserve funds required for future major repairs and replacement of the common elements based on a visual inspection of the common elements.”

“When all 100% of condominium buildings complete their structural integrity reserve study, we'll have a pretty good idea of what is the increase in the condo fees,” Lopez said. “That's what I don't have right now. So if I went into a special session today, I wouldn't know, is it just a problem in South Florida, where the vast majority of condominiums are, or is it across the state?”

The governor’s calls echo that of Sunrise Mayor Mike Ryan, who told WLRN "our economy is facing a catastrophe or a calamity if we don't take action now” regarding condos.

But Lopez said there isn’t enough data to determine if concerns over reforms are supported by evidence.

“I think that there is different things that are happening in the market right now that are, in fact, real, and we have to look at them,” she said. “There's no way that we can ignore what may be going on. And I say it's always a very complex situation, because you also can't have this conversation without having the conversation that we don't have enough affordable housing. Because let’s say that you do sell your condo, right, or you’re ready to leave. Where are you going to go is the next question.”
Assessment deadlines

Florida law requires condo associations existing on or before July 1, 2022, to complete a structural integrity reserve study by Dec. 31, 2024.
 

It’s separate from a milestone inspection, which is only required for buildings that are three or more stories high and reach 30 years of age.

“The milestone inspections is what tells you whether or not your building is structurally sound, and if it is, it usually results in some kind of repairs that need to be made in order to keep it structurally sound,” Lopez said. “And that is what's known as the special assessment, something you couldn't have predicted, something you couldn't have budgeted, and something that you may not even have money for. And those are, in fact, ranging between, like, a million dollars to $34 million, which is the interesting part.”

The deadline for the milestone inspection depends on the age of the condo building, according to the 2024 Florida Statutes. It must be performed by Dec. 31 the year the building is 30 years old, and every 10 years after. If a building is 30 years old before July 1, 2022, the initial inspection is due before Dec. 31, 2024. If a building is 30 years old on or after July 1, 2022, and before Dec. 31, 2024, then it’s due before Dec. 31, 2025.

“The only thing that's due by the end of the year is the actual completion of the structural integrity reserve study,” Lopez said. “And that will give you, it's supposed to be a prospective budget tool. And it also says, the law says that any budget passed on or after Jan. 1 of 2025 must include those reserves.”

Florida law says this regarding the reserves deadline: “For a budget adopted on or after December 31, 2024, the members of a unit-owner-controlled association that must obtain a structural integrity reserve study may not determine to provide no reserves or less reserves than required by this subsection … except that members of an association operating a multicondominium may determine to provide no reserves or less reserves than required by this subsection if an alternative funding method has been approved by the division.”

But Lopez said there’s a catch.

“Most condominium associations don't pass their budgets until the end of the year for the succeeding year. So that would mean that any budget passed in November or December of 2025 for the 2026 year, would have to include those reserves. So people aren't really going to see the effects of the structural integrity reserves until the beginning of 2026.”

Going back to a special session this year, Lopez noted she’s not aware of lawmakers creating legislation regarding condos.

“We do know that President (Kathleen) Passidomo, the current president of the Senate, has said that she's not in favor of a special session, that, in fact, we will have time during regular session to address all this. And again, remember, no one's going to be paying for any increases in reserves until 2026 so I think she's right,” she said. “I think we're going to have time to be very thoughtful and intentional about what our reforms should be.”

If the Florida Legislature convened a special session, Lopez said she would focus on very old condo buildings, such as those in South Florida that are over 30 years old.
 

In the meantime, she still advises prospective buyers not to buy a condo in the state.

“I feel like if the structural integrity reserve studies haven't been completed, you don't really know what you're entering into when you purchase a condo. So I've actually said to everybody, you've got to make sure that you know what are all of the costs going to be,” Lopez said.

“Because I believe in transparency and real estate transactions. So how much is the property insurance going to be? Are you undergoing a milestone inspection? What are those special assessments going to be? And then when the structural integrity reserve study tells you what you're going to have to pay in the future, what is that going to be?”