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
FIRE SAFETY
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. .
THE
TIMELINES
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.
