Article Courtesy of Florida Politics

By Jesse Scheckner

Published  January 21, 2025

‘A cottage industry has popped up because of this.’

Florida has made some progress on improving building safety, but there’s more lawmakers can and should do to address the problem while helping unit owners keep their property and avoid being taken advantage of by predatory contractors.

That was the gist of a meeting the Senate Regulated Industries Committee held Tuesday with a panel of condo industry experts. The state’s condo crisis has been long festering, all agreed, and while legislative action in recent years has helped expose the underlying issues and set new safety guardrails, more action from Tallahassee is needed.

Florida lawmakers passed new requirements for condo associations following the 2021 building collapse in Surfside that killed 98 people in June 2021. Key among them: “milestone inspections” for buildings three or more stories tall, once they reach 25 or 30 years of age, and structural integrity reserve studies (SIRS) — most of them due Dec. 31 — to evaluate each condo’s condition and how much money associations need to set aside for future repairs.

Condo owners, many on fixed incomes, have since seen their fees skyrocket — in some cases by six figures — due to the demands of the new requirements. Some owners have since sold their units and left Florida.

Just two counties in Florida — Miami-Dade and Broward — had similar requirements before the Surfside-related legislation. But even in those counties, condo associations have not been properly saving, said Fleming Island Sen. Jennifer Bradley, one of the architects of the state’s recent condo reforms.

“If you don’t address the root cause, which is the financial health of making sure that people as they’re living in a building pay as (they use it), what (they) in effect have done is shift the burden onto a future owner,” she said.

Broward-based CPA Guy Strum, who has worked on SIRS policy for decades, agreed that, beyond the physical danger, the most pressing issue in the condo crisis is how to pay for the necessary repairs.

The “overwhelming majority” of condos, he said, are “woefully underfunded.”

To help fix the issue, Tara Stone, CEO of Stone Building Solutions, which operates in Florida and New Jersey, said lawmakers should swap a requirement that condo associations be “fully funded” for repairs with one requiring them to be “adequately funded” for immediately needed ones, as determined by a professional.

Stone said lawmakers should consider expanding the legislation’s scope. She cited milestone inspections by her company that found troubling structural problems with buildings as short as two stories. Stone added that younger buildings also exhibit serious problems. She showed pictures taken at one development built in 2006, which had 42 buildings, more than two-thirds of which had just two levels, and internal material that was “completely rotten from the top to the bottom.”

“This is not an isolated issue,” she said.

Hollywood Democratic Sen. Jason Pizzo, who filed condo safety legislation six years ago, asked Stone whether she and other inspectors have witnessed conditions in Florida that pose “a legitimate and possibly imminent threat to public safety,” Stone said yes without hesitation.

Stone estimated about 20% of associations in the state have kept their books — and properties — well-maintained. SIRS are akin to “a new credit score” lenders, insurers and homeowners can examine to determine, “What am I actually buying?” she said.

Condo owners are also at risk of predation by unscrupulous opportunists, according to engineer Matt Kuisle, Regional Executive Director for Milwaukee-headquartered Reserve Advisors.

Kuisle said professional engineers sign codes of ethics holding them to certain standards. But Florida law today includes a rather permissive standard that SIRS “may be performed by any person qualified to perform such a study,” as long as the study is based on professional inspection.

That’s led to an influx of companies offering SIRS services. Kuisle said that before 2021, “maybe 10 to 15” operations in Florida that conducted SIRS. Today, there are more than 70.

“A cottage industry has popped up because of this,” he said. “I think that there are … some bad actors out there looking for opportunities to make money and profit off of condo associations that are maybe not as informed.”

Some companies are double-dipping too, Bradley added.

Bradley said she’s working with a Jacksonville condo association that recently had its first milestone inspection. The inspection company said the building needed $12 million in repairs, then offered a referral to a company it said could fix the issue — which it also owned.

“That’s problematic,” Bradley said.

On Monday, Gov. Ron DeSantis called for a Special Session on Jan. 27 so lawmakers could tackle condo repair cost issues and other “unintended” effects.

“We have a responsibility to act to make sure that people can stay in their condo units,” he said. “The Legislature should not be doing anything that’s going to cause someone to flee because of an artificial mandate.”

Former Senate President Kathleen Passidomo downplayed the issue’s urgency after DeSantis, CFO Jimmy Patronis and former Sen. Jeff Brandes made similar assertions last year. Miami Rep. Vicki Lopez, who partnered with Bradley on the condo legislation, said lawmakers should wait until January, when the new condo assessments were due and could show how much reserve funding buildings in the state need for repairs.

A new study by the Florida Policy Project, which Brandes leads, found listings in the state have surged by 56% but that investors who would typically scoop up the properties aren’t doing so amid legal concerns.