Skip to Content

New Florida Condo Rules: What You Need to Know!

Mon Jul 8, 2024 by on News

New Florida Condo Rules: What You Need to Know!

As we discussed in previous blogs, new laws affecting Florida condominium ownership were presented in the aftermath of the horrific 2021 Surfside, Florida tragedy. Ultimately, the Florida State Legislature in 2022 failed to agree of a package of safety reforms which would have required inspections of older buildings, mandated monetary reserves for condominium associations, and provided public transparency for maintenance and inspection reports. At that time, the requirement of financial reserves was perhaps the biggest issue on which the two legislative houses did not agree.

Last month Governor Ron De Santis signed HB 1021, which went into effect July 1, 2024, is meant to strengthen oversight of condo buildings and their boards, making them more accountable for maintenance, repairs, reserves, and bookkeeping. The bill, called “Condo 3.0”, is creating controversy, which ultimately may affect real estate condominium sales.

What are the new rules for Condo Boards?

Condo 3.0 is aimed at cracking down on corrupt condominium boards and increasing transparency for unit owners. As discussed recently, the bill includes the following:

— Set criminal penalties for condominium board members who accept kickbacks; engage in voting fraud related to board elections; or fail to maintain or provide access to public records.

— Give the Florida Department of Business and Professional Regulation more power and funding to enforce existing condominium laws and investigate condominium boards accused of wrongdoing.

— Prohibit associations from retaliating against unit owners by suing them for defamation or increasing assessments.

— Require associations with twenty-five units or more to make records available to condominium owners through an online webpage by January 1, 2026.

— Require new board directors to undergo four hours of mandatory training on inspections, recordkeeping, financial literacy and more. All directors must undergo an hour of continuing education annually.

— Mandate that condominium boards hold four meetings a year with dedicated time for unit owners to ask questions.

— Includes disclosure requirements for condominium owners looking to sell their units. Effective October 1, 2024, owners must provide prospective buyers with the condominium association’s annual financial statement and annual financial report.

Who owns the common areas in condo?

Typically, condominium developers turn over common areas of the condo building to the condo association once all of the units are sold. These common areas include pools, elevators, hallways, lobbies, and outdoor green areas. However, issues have arisen when developers claim that they own the spaces not the condominium owners.

There is a provision that was included in Condo 3.0 that could provide developers of mixed-use condominiums more control over the common areas. This has drawn criticism from condominium owners who believe that this provision would prevent them from having decision-making powers in their buildings, potentially having them at the mercy of a developer. This could mean that a developer may be able to raise assessments without approval from the condominium board.

What are the new safety requirements for condominiums?

Under the new rules, the following is required:

— Condos three stories and higher must undergo an inspection after 30 years and every 10 years thereafter. This will determine whether the building is structurally sound or needs repairs.

— Buildings that are already 30 years or older must have inspections completed before the end of the year.

— Condos three stories and higher must review reserve funds before year end and every 10 years thereafter. This will determine the amount condominium associations must have in reserves to properly maintain the building.

— Condos must determine a budget adopted on or after Jan. 1, based upon their reserves

— Condo associations three stories and higher will be barred from waiving or underfunding reserves.

What does this all mean?

The Surfside tragedy caused us to reassess condominium ownership, specifically as far as the necessity of making sure that there are enough reserves to maintain the integrity of the building itself.

This new law will require certain safety repairs and restoration to be done. While safety is the number one priority, not all condominium owners will be able to  pay for sch special assessments. Further, condominium owners may not be able to control the cost of repairs for common areas if the condo developer still retains control over the common areas.

While we all may agree that sweeping laws and enforcement have been long overdue concerning the safety and governance of condominium ownership, there will be an effect on the condominium market. How? In many older condominiums, unit owners that may be on fixed incomes and unable to provide their pro rata share of reserves needed to make  necessary repairs may inevitably sell. As a result, there may be increased condominium units on the market, causing sale prices to lower. More people may seek to rent, placing more pressure on the rental market. Finally, insurers will certainly increase their premiums on liability policies on older buildings that do not have adequate reserves as their financial exposure will invariably increase.

Bottom line:  The make-up of the overall condominium community may shift in time, as unit owners in older condominiums may not have the funds to remain at their unit. Those condominium buildings that require substantial restoration may be eventually demolished, making room for new condominiums with unit owners able to place substantial amounts collectively in reserves.

Due to the new law,  legal representation for both buyers and sellers of condos is critical, as the complexity of disclosure laws for sellers and the required due diligence of buyers is paramount. There is also increased potential liability of condo board members that sell their units as they have unique,  specific knowledge and an obligation to disclose than a typical condo unit seller.

Should you find yourself in this situation, feel free to call us at 954-384-6114 to schedule a convenient consultation. Our real estate team, in conjunction with our separate real estate title company, Weston Title & Escrow, Inc., has been here for you for over thirty years, providing strategy, guidance, and assistance with your real estate needs.