On June 9, 2023, Governor DeSantis signed into law Senate Bill 154 (SB 154, also known as the “Glitch Bill”), which previously passed unanimously in both chambers of the Florida legislature in early May. 

As discussed during our webinar on May 23, 2023, SB 154 is intended to address numerous ambiguities, urgencies, and compliance difficulties (“glitches”) that resulted from the hasty passage of the May 2022 legislation (SB 4D) in emergency session in response to the collapse of the Champlain Towers South Condominium in Surfside, Florida.  

Below is a quick update and refresher of the major items SB 154 addresses. 

MILESTONE INSPECTION REQUIREMENTS:

• Clarifies that milestone inspection requirements apply only to residential condominiums.
• Addresses the “manpower” problem created by looming deadlines and insufficient resources by providing that inspections can be provided by a “team of professionals” with the architect or engineer acting as a registered design professional in charge of the inspection report.
• Modifies the definition of “substantial structural deterioration” to add “substantial structural weakness.”
• Inspections for buildings that reach 30 years of age before July 1, 2022, still must performed before Dec. 31, 2024. However, if a building reaches 30 years between July 1, 2022, and before Dec. 31, 2024, the inspections deadline is extended until Dec. 31, 2025.
• Removes the strict deadline that inspections must be completed by the 25th year for buildings within 3 miles of coast, instead deferring to municipal authority who may determine that proximity to coast necessitates an inspection by the 25th year.
• Permits municipalities to extend the inspection deadline for “good cause” if the association has entered into a contract for the inspection but cannot get the inspection completed by the deadline.
• Permits municipalities to accept a 40- or 50-year recertification report (i.e., Miami-Dade and Broward counties) completed before July 1, 2022, if it substantially complies with the statute’s new inspection requirements. 
• Phase 1 of the inspection must be completed within 180 days after receiving notice from the municipality that the inspection report is due.
• Associations must notify owners by mail, hand delivery, or email (if owners have consented to email notice) within 14 days after receipt of notice from the municipality that the milestone inspection must be performed and the notice from association must give the date by which the inspection must be completed. 
• If Phase 2 is needed (i.e., if Phase 1 detected “substantial structural deterioration”), the architect or engineer must submit timelines for completion within 180 days of Phase 1.
• Associations must post (on website, if applicable) and mail, hand deliver, or email a summary of the report to owners within 45 days from receiving report from the engineer or architect. 
• If the inspection report discovers substantial structural deterioration, the deadline for commencing required repairs is 365 days after receipt of the report (or earlier if required by municipality).

RESERVES – Mandatory Funding Requirements and Structural Integrity Reserve Studies (“SIRS”):

• Clarifies that SIRS requirements only apply to residential condominium associations.
• Clarifies that reserves are only required to be funded for building components for which the association is responsible to maintain, repair and replace under the declaration of condominium.
• Increased the percentage of members needed to approve a waiver or alternative use of reserve funds from a majority of a quorum (owners voting) to a majority of the total membership (all owners).
• The Florida Building Commission must adopt rules to establish a building safety program by Dec. 31, 2024, which, at a minimum, must include inspection criteria, testing protocols, standardized testing and reporting forms, and records maintenance and retention requirements for local authorities.
• Allows multi-condominium associations operating at least 25 condominiums to use an alternate funding source for reserves (i.e., line of credit). 
• Reserves must be funded based on the most recent SIRS.
• Reserves are not needed for replacement costs for items for which the estimated remaining useful life exceeds 25 years or is not readily ascertainable. However, reserves are still required for deferred maintenance for those items.
• Added exterior doors into subsection (g) reserve components and removed floor and foundation but added the word structure (which naturally includes the floor and foundation).
• Allows a reserve specialist to perform the visual inspection of SIRS in addition to an architect or engineer.
• Associations that have completed a 40- or 50-year certification report (i.e., Miami-Dade and Broward counties) that substantially conforms with SIRS requirements may use such reports in lieu of the visual inspection portion of SIRS.
• Adds provision that a violation of new reserve requirements must be “willful and knowing” to be considered breach of officers’ and directors’ fiduciary duty.

MISCELLANEOUS: 

• Excludes insurance premiums from calculation of whether proposed budget exceeds 115% of the prior year’s budget, which would permit owners to propose an alternative budget.
  • Severely needed due to skyrocketing insurance premiums statewide
• DBPR Division of Condominiums now has jurisdiction under Fla. Stat. 718.1255 regarding unit owner complaints about Board of Directors’ alleged failure to complete required milestone inspections or SIRS, properly fund reserves, and/or to repair and maintain the building as recommended by the SIRS or milestone inspections.
• New presale disclosure requirements and new provisions requiring form language be added to sale contracts for residential condominium units for both new construction and existing projects, specifically referencing the new inspection and reserve requirements and the developer’s/association’s compliance or lack thereof.