In the wake of the June 24, 2021, collapse of a Surfside, Florida, condominium comes changes to Florida legislation, the FAR/BAR Rider A. Condominium Rider, the FAR Contract for Residential Sale and Purchase Condominium Association Addendum F., and Addendum to Contract for Sale and Purchase of Cooperative. Florida law now requires certain condominium associations and cooperatives to conduct a “milestone inspection” and “structural integrity reserve study” aimed to protect public health, safety, and welfare. Effective March 20, 2023, the revised contract riders will require that a seller provide a buyer, at the seller’s expense, a copy of the milestone inspection and structural integrity reserve study, if applicable and if available from the governing association.
What is the Milestone Inspection?
The milestone inspection is a physical inspection to determine a condominium or cooperative building’s structural integrity. The inspection report must, among other things:
- Identify any substantial structural deterioration and recommend repairs;
- State whether unsafe or dangerous conditions are observed; and
- Recommend any remedial or preventive repairs for damaged items that are not considered to be substantial structural deterioration.
Specifically, these inspections are required for condominium and cooperative buildings three stories or higher that have been (i) occupied for 30 years or more or (ii) occupied for 25 years or more and located within three miles of the Florida coastline. The inspection must be completed by December 31 of the year in which the building reaches 30 or 25 years of age, as applicable, and every ten years thereafter. If a building’s certificate of occupancy was issued on or before July 1, 1992, the initial milestone inspection must be completed before December 31, 2024.
The Structural Integrity Reserve Study
The structural integrity reserve study is a study of reserve funds necessary for future major repairs of the common elements of a condominium or cooperative that are three stories or higher. The study must:
- Identify the common areas being inspected;
- State the estimated remaining useful life and estimate the replacement cost of the common areas being inspected; and
- Provide a recommended annual reserve amount that achieves the estimated cost of replacement of such common areas by the end of the estimated remaining useful life.
The study must be completed at least every ten years. The findings in the study will provide owners and potential buyers of condominium and cooperative units great insight as to future assessments they might be responsible for.
For more information on these changes to the legislation and contract riders, contact your trusted real estate attorney.