Page 13 - Boca Club News - April '22

Boca Club News, Page 13
Legal: New Law to Prevent

Surfside Type Disasters Fails to Pass

By Michael J. Posner, Esq., a partner As part of the annual budget for a condominium in An independent study of the Surfside Condominium
in Ward, Damon, Posner, Pheterson & Florida, the Board of Directors must include reserve revealed that years of waivers of reserves by the owners
Bleau, P.L. a mid-sized real estate and funding for capital expenditures, deferred maintenance, in Surfside left the Association severely underfunded for
business-oriented law firm serving all and any other category for which the association maintains necessary repairs and maintenance. While not required by
of South Florida, with three offices in reserves (painting, roof and parking lots, for example). The law, Surfside had obtained a reserve study to determine
Palm Beach County. They specialize in reserves ensure that sufficient funds are available when the how much funds the Association needed for ongoing
real estate and association law. They needed repairs or replacements are required. However, the maintenance and repair to various structural components of
can be reached at (561) 594-1452 or unit owners have the power, at a duly called meeting of the the Condominium. The study showed that the Association
at mjposner@warddamon.com. members, to waive reserves, in whole, or in part, by a simple was underfunded by nearly 93% of the amount needed
Last year, the Champlain Towers Condominium in majority vote at the members’ meeting. Since the cost of to complete repair and replacement projects and stay
Surfside collapsed, killing 98 people. Lawsuits are ongoing, reserve funding can be expensive, the short-term benefit of financially secure.
but reports indicate that a myriad of issues caused the waiving reserves is that condominium assessments are lower, Reserve studies are an important tool that large
building to fail, including improper design, poor quality which aids current owners at the expense of future owners associations should use to determine structural integrity and
construction and the failure to fund necessary maintenance who will have to face substantial special assessments to fund remaining life of their condominium infrastructure. At one
and repair to the structure. necessary maintenance and repair. time, Florida law required reserve studies be made every
five years, but this law was repealed in 2010 due to concerns
from lobbyists for large condominium associations that the
reserve studies were resulting in dramatic cost increases in
association assessments. Increases in assessments can overly
burden homeowners on fixed income, forcing some to have
to sell their units due to their inability to pay the much higher
cost of assessments due to required funding of reserves. In
Is Something Missing From Your Life? addition, large assessments make many condominium units
less attractive in the resale market.
Beth Ami Congregation opens its doors to all! In the wake of the Surfside Condominium disaster, the
Prospective members are welcome Florida legislature set about to pass a new law, with the goal
Current members are welcome to re-connect of avoiding a similar disaster in the future. Despite strong
support from both parties, the Florida House and Senate
Come join us Friday evenings at 6:00 PM for a spiritual musical passed two different bills which could not be reconciled,
Kabbalat Shabbat / Ma’ariv service with Cantor Michael Glozman resulting in no action being taken to address this issue.
Both bills received unanimous support in their chambers,
Oneg following services requiring Condominium Associations to obtain reserve

Saturday Services - 9:30 AM studies to determine the life remaining in Association
Followed by a lovely Kiddush maintained elements so that sufficient funds could be reserved
for those replacements. For example, if a Condominium roof
1401 NW 4th Avenue, Boca Raton, FL 33432 will need to be replaced in ten years at a cost of one hundred
Please rsvp synagogue office - 561-347-0031 thousand dollars, the Association should be reserving at
least ten thousand dollars per year to fund that replacement
Visit our website: bacboca.org in ten years. The proposed law also required more frequent
inspections and certifications of condominium projects.
For example, Miami-Dade County requires buildings to be
recertified every forty years (Surfside was actually in the
middle of its recertification when the building collapsed).
The sticking point between the House and Senate bills
was the ability to continue to waive reserves. The House bill
specifically closed the loophole that allowed Associations to
waive reserve funding. The Senate bill specifically allowed
reserves to continue to be waived, and the two chambers could
not reconcile that issue during the legislative session. The
Senate was concerned about the financial burden that would
be imposed upon Condominium owners who suddenly had
to fund reserve accounts that were severely deficient.
Surfside, after getting the reserve study, went out and
acquired a twelve million dollars loan to fund needed
improvements, which resulted in a fifteen million dollars
special assessment to cover the cost of the loan. All this was
done in the months prior to the collapse, but was ultimately
too late to prevent the tragedy.
Given how each bill passed with substantial bipartisan
support, it is very likely that the Florida Legislature will
again address this issue in 2023, as long as the issue of
reserve funding can be addressed. It is also expected that
many counties will consider adopting building recertification
programs similar to current programs in Broward and
Miami-Dade Counties. Currently, these counties require
recertification every forty years, but there has been discussion
of changing the certification period to as early as every
twenty-five years.
Palm Beach County does not have a recertification
program, and is currently not considering adopting same
despite some public outcry.