Article Courtesy of The Real Deal

By Lidia Dinkova and Katherine Kallergis

Published  March 4, 2025

Florida Rep. Vicki Lopez filed a bill that would limit the state’s insurer of last resort, Citizens Property Insurance, to condo associations that are abiding by safety laws passed after the deadly Surfside collapse.

House Bill 913, filed by Lopez, a Republican whose district includes Key Biscayne, takes aim at other aspects of the state Condo Act, including seeking to impose more financial transparency at condo-hotels.

The bill would also allow association boards to levy special assessments and secure loans for necessary maintenance, repairs and other projects tied to life-safety issues, bypassing the need for a general vote.

It would ease condo terminations at aging buildings where repairs are too costly, essentially giving developers that own a majority of units at condo buildings a stronger hand when trying to terminate associations and redevelop the property. Yet, attorneys say that as the bill is written, it wouldn’t have a huge effect.

HB 913 also calls for electronic voting, which could benefit foreign investors who often miss elections.

The proposed legislation follows three consecutive years of state lawmakers tweaking the Condo Act, mainly to beef up structural safety regulations after the deadly Surfside collapse in 2021.

Under laws passed in recent years, condo buildings that are over 30 years old and are more than three stories tall had to have completed structural integrity reserve studies (SIRS) by the end of last year. Starting this year, associations must fund their reserves in their future budgets, based on these studies. In addition, state law mandates milestone inspections for condo buildings that are over three stories once they are 30 years old, and then every 10 years afterward.

Now, Lopez’s bill proposes to pull back Citizens coverage for condo associations that fail to meet these safety laws. The state-run insurer provides property, wind and fire policies, with many condo associations relying on Citizens after several insurers have pulled out of the state.

State Sen. Ileana Garcia, a Republican, is critical of the bill. She told the Miami Herald that the proposed legislation “threatens to significantly displace thousands of condominium owners in Florida, all in an effort to pave the way for private companies to enter the market.”

Travis Moore, a lobbyist for condo associations group Community Associations Institute, said better ways exist to enforce compliance with structural safety laws. For example, lenders issuing mortgages to prospective condo buyers will seek documentation that confirms associations complied with safety requirements. If associations fail to meet the regulations, unit owners who are unable to sell their condos could sue board members individually.

“The enforcement is that board members can be personally sued for violating their fiduciary duty, and doing these [safety] requirements is part of their fiduciary duty,” Moore said. “If I can’t sell my unit because my board did not do a SIRS, I am going to sue my board. That to me seems to be a better enforcement tool than just saying, ‘You can’t get coverage by the main admitted carrier writing commercial residential policies.’”

The threat to pull Citizens from noncompliant condo associations comes as many in South Florida have failed to finish their SIRS on time.

In Miami-Dade County, 56 percent of condo associations and co-operatives have yet to complete their SIRS. In Broward County, 59 percent of properties failed to comply; and in Palm Beach County, 72 percent of associations haven’t completed their SIRS, according to a Miami Association of Realtors report, which cited state data.

“That raises a lot of concerns in people’s minds,” said condo attorney and lobbyist Pete Dunbar of Jones Walker. “The whole goal is to ensure public safety and to avoid the kinds of collapses that were so tragic.”

Condo terminations

Proposed language surrounding condo terminations (which are a required step before developers can tear down buildings and redevelop those sites) may be a result of the Biscayne 21 case. The Third District Court of Appeal last year ruled in favor of eight holdout condo owners at Biscayne 21, a bayfront condo building in Miami’s Edgewater.

The ruling put the plans of the developer, Two Roads Development, in limbo as it seeks a rehearing. The holdout owners sued Two Roads in 2023, alleging that the developer-controlled condo association illegally amended the condo declaration to lower the requirement for a condo termination to 80 percent of owners, from 100 percent.

Attorneys said HB 913 wouldn’t radically change how condo terminations get done. The proposed bill details how condo terminations can move forward in cases of “economic waste or impossibility,” which means the cost to repair buildings is greater than the value of the properties. This kind of termination is one of three ways condo associations can be terminated in the state.

Bilzin Sumberg attorney Joseph Hernandez said the proposed condo termination language regarding valuations is a bit arbitrary, but that the language will likely change. “We’re at a time where we need clarity with respect to terminations,” he said.

Lobbyist Moore said the value of the land under a condo building may need to be taken into account before determining whether it is costlier to repair a building than to rebuild. The oceanfront site of the Champlain Towers South condo, which collapsed in 2021, killing nearly 100 people, sold for $120 million.
Votes would be scrapped

At some condo associations, governing documents and by-laws mandate approval by a majority of unit owners to borrow loans and levy special assessments for maintenance and repairs required under SIRS and milestone inspections. Lopez’s bill would scrap this, putting this authority in the hands of boards of directors.

The requirement for a vote by unit owners “endangers the public safety” and “there is a compelling state interest in enabling the board” to levy special assessments and take out loans, the bill says.

But this language needs to be carefully crafted, one expert said. At some associations, boards have included non-essential repairs within what’s budgeted for SIRS and milestone inspections, the expert said.

Condo-hotels

The bill also aims for more financial transparency at condo-hotels. At these mixed-use complexes, the condos are individually owned and an investment firm usually owns the hotel; amenities such as spas, pools and gyms; and the common areas such as lobbies, hallways and heating, ventilation and air conditioning systems. These investors, known as the commercial lot owners at condo-hotels, generally control the master associations and have greater control, including to levy assessments on condo owners for maintenance and repairs of amenities and common areas.

At some condo-hotels, such as the Epic Hotel & Residences in downtown Miami, which is part of Lopez’s district, the condo association representing unit owners has alleged the commercial lot owner, Spanish billionaire Amancio Ortega’s Grupo Ponte Gadea, charged illegal assessments.

Under the bill, a complete financial report of all costs for maintaining and managing condo-hotels’ common areas, including receipts and invoices, have to be provided to associations within 60 days after the end of each fiscal year. The bill does not specify whether that is a reference to condo associations, which represent unit owners, or master associations, which often consist mostly of representatives for commercial lot owners.

The state session starts on Tuesday.

Ultimately, any bill passed into law needs “to make sure we are balancing the needs of associations, developers, Realtors and all the stakeholders with whatever product the legislature ends up passing this session,” Moore said.