Tag: Condominium Association

5 things condominiums need to know about Florida’s new “milestone inspection” requirement

By Anita Byer, Setnor Byer Insurance & Risk

Florida enacted a new “milestone inspection” requirement for condominium associations to ensure aging buildings remain safe for continued use. The hope is that a statewide mandatory structural inspection requirement will prevent a repeat of last year’s tragic collapse in Surfside, Florida. Here are five things every condominium association board member needs to know about Florida’s new milestone inspection requirement.

1. What is a milestone inspection? A “milestone inspection” is a structural inspection of a building, including its load-bearing walls and primary structural systems, by a licensed architect or engineer. Its purpose is to confirm the life safety and adequacy of the building’s structural components and determine its general structural condition as it affects building safety. A milestone inspection should include, to the extent reasonably possible, a determination of any necessary maintenance, repair or replacement of any structural component of the building.

2. When is a milestone inspection required? Condominium associations must have milestone inspections performed for each building that is three stories or more in height by December 31 of the year in which the building reaches 30 years of age, and every 10 years thereafter. If the building is located within three miles of a coastline (direct contact with the open sea), a milestone inspection is required by December 31 of the year in which the building reaches 25 years of age, and every 10 years thereafter. A building’s age is based on the date the certificate of occupancy was issued.

Note that if a milestone inspection is required and the building’s certificate of occupancy was issued on or before July 1, 1992, the building’s initial milestone inspection must be performed before December 31, 2024.

3. What is a phase one milestone inspection? A milestone inspection consists of two phases. For phase one, a licensed architect or engineer performs a visual examination of a building, including its major structural components, and provides a qualitative assessment of the building’s structural condition. If no signs of substantial structural deterioration are found, then a phase two inspection is not required. “Substantial structural deterioration” means substantial structural distress that negatively affects a building’s general structural condition and integrity. It does not include surface imperfections (cracks, sagging, signs of leakage, peeling of finishes, etc.) unless they are a sign of substantial structural deterioration.

4. When is a phase two milestone inspection required? A phase two milestone inspection must be performed if any substantial structural deterioration is identified during phase one. The inspection may be as extensive or as limited as necessary to fully assess areas of structural distress in order to confirm that the building is structurally sound and safe for its intended use and to recommend a program for fully assessing and repairing distressed and damaged portions of the building. The phase two inspection may involve destructive testing at the inspector’s direction, though preference must be given to locations that are the least disruptive and most easily repairable.

5. What happens after a milestone inspection? Upon completion of a phase one or phase two milestone inspection, the architect or engineer must submit a sealed copy of the inspection report to the condominium association, along with a separate summary of material findings and recommendations. A copy must also be furnished to the appropriate local building authority. The inspection report must include all the information required by the statute. Condominium associations must then distribute the inspector’s summary to each unit owner and post a copy in a conspicuous place on the condominium property. Associations required to maintain a website must also make the full report and the inspector’s summary available online.

The new law makes each condominium association responsible for arranging milestone inspections and ensuring compliance with the law’s requirements. Associations are also responsible for all costs associated with the inspection. Since this is a new requirement, condominium associations are strongly encouraged to consult with licensed professionals to avoid unintentional violations. Board members should also review their association’s Directors and Officers (D&O) insurance policy to confirm sufficient coverage. Because when it comes to safety, there’s no room for error.

Setnor Byer Insurance & Risk can help condominium associations and board members identify, manage and insure their unique risks. Please contact our team to discuss the various risk management services we provide our condominium association clients, including our Division-Approved New Board Member Education.

Condominium Governance: Navigating Florida’s New Emotional Support Animal Law

Florida’s new emotional support animal law makes it unlawful to discriminate in the provision of housing to a person with a disability or disability-related need for an emotional support animal. As of July 1, 2020, a person with a disability or a disability-related need for an emotional support animal must, upon the person’s request and approval by the housing provider, be allowed to keep such animal as a reasonable accommodation without having to pay extra compensation. Condominium associations engaged in conduct covered by the federal Fair Housing Act are considered “housing providers” under this new law.

It’s important to note that the new law applies to emotional support animals, not service animals trained to do work or perform tasks for an individual with a disability. Service animals are covered under a separate statute. An “emotional support animal” is an animal that does not require training to do work, perform tasks, provide assistance or provide therapeutic emotional support by virtue of its presence which alleviates one or more identified symptoms or effects of a person’s disability. However, an emotional support animal registration of any kind, including one obtained from the Internet, is not by itself sufficient to reliably establish a person’s disability or disability-related need for an emotional support animal.

If a person’s disability is not readily apparent, a housing provider may request reliable information that reasonably supports that person’s disability, which may include a determination of disability by a federal, state or local government agency or information from a licensed health care practitioner who is eligible under the statute to provide such information. If a person’s disability-related need for an emotional support animal is not readily apparent, a housing provider may request reliable information that reasonably supports the person’s need for the emotional support animal being requested. However, a housing provider may not request medical records relating to the disability or information that discloses the nature or extent of disability. Board members should be aware that another new statute makes it a crime to falsify or provide fraudulent information or documentation, or to knowingly and willfully misrepresent a disability or a disability-related need for an emotional support animal.

Unless otherwise prohibited by law, a reasonable accommodation request may be denied if the emotional support animal poses a direct threat to people or property that cannot be reduced or eliminated by another reasonable accommodation. Under the new law, a person with an emotional support animal is liable for any damage or injury caused by the animal. They must also comply with applicable licensing and vaccination requirements.

The consequences for mishandling a request for an emotional support animal can be severe. Board members should proceed cautiously and seek legal guidance when necessary. Setnor Byer Insurance & Risk can help associations and board members identify, manage and insure their unique risks. Clients enjoy access to various risk management services, including our Unit Owner Report Line and Division-Approved New Board Member Education.

When Can Condominium Associations Enter Abandoned Units?

Abandoned units can be a big problem for condominium associations. What if an abandoned unit has a water leak, mold or faulty wiring? Fortunately, Florida’s Condominium Act provides associations with a powerful solution. Regardless of any authority provided in the condominium documents (declaration, bylaws, etc.), the association board may, in its sole discretion, enter abandoned units to:

Except in cases of emergency, an association must wait two days after giving the owner written or electronic notice of its intent to enter the unit. Unless the owner provides written notice to the contrary, a unit is presumed to be abandoned if:

  • the unit is in foreclosure and appears to have been vacant for at least 4 continuous weeks; or
  • the unit appears to have been vacant for 2 consecutive months and the association is unable to contact or locate the owner after reasonable inquiry.

Any expenses incurred by the association can be charged to the unit owner and collected using the association’s lien authority. Associations can also request a court-appointed receiver to lease abandoned units and use the rental income to offset the costs and expenses of maintaining, preserving and protecting the unit and the adjoining common elements.

The right to enter abandoned units is broad, but not unlimited. Condominium associations should consult with licensed professionals to ensure compliance with Florida’s statutory requirements.

Setnor Byer Insurance & Risk offers condominium associations access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Electronic Report Line and Florida Division-Approved New Board Member Education Certification online training.

Understanding Florida’s Statutory Insurance Requirements for Condominium Associations

Every condominium association should have insurance, which is precisely why Florida law requires them to have insurance. Associations must use their best efforts to obtain and maintain adequate insurance to protect the association’s property. Florida’s minimum mandatory insurance requirements apply to every residential condominium, regardless of when the association was created.

Property Insurance. Condominium associations are required to have adequate property insurance. Coverage must be based on the replacement cost of the property, even if the declaration of condominium provides otherwise. The replacement cost must be determined by an independent insurance appraisal at least once every 36 months.

The association’s policy must provide primary coverage for:

  • All portions of the condominium property as originally installed or replacement of like kind and quality, in accordance with the original plans and specifications; and
  • All alterations and additions that were properly made to the condominium property.

The law identifies specific types of property that unit owners must insure themselves. Consequently, the association’s policy must exclude coverage for the following property if it is located within the boundaries of a unit and serves only that unit:

  • Personal property within units or limited common elements;
  • Floor, wall and ceiling coverings;
  • Electrical fixtures, appliances, water heaters and water filters;
  • Built-in cabinets and countertops; and
  • Window treatments (curtains, drapes, blinds, hardware, similar components).

Policies may include a deductible, but it must be consistent with industry standards and prevailing local practices for communities of similar size, age, construction and facilities. The board must hold a meeting to establish the amount of the deductible based on the level of available funds and predetermined assessment authority.

Fidelity Bonding. Condominium associations must have insurance or fidelity bonding covering every person who controls or disburses funds, including the association’s president, secretary and treasurer, and any person authorized to sign association checks. The policy or fidelity bond must cover the maximum funds that will be in the custody of the association or its management agent at any one time.

Other Insurance. Florida’s Condominium Act authorizes associations to obtain other types of insurance, including:

  • Directors & Officers liability insurance;
  • insurance for the benefit of association employees: and
  • Flood insurance for common elements, association property and units.

Setnor Byer Insurance & Risk can help your association update its insurance portfolio to meet Florida’s statutory insurance requirements. Clients of Setnor Byer’s Condominium Insurance Programs enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Report Line, and our New Board Member Education Certification training, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

You can receive regular updates about developments that may affect your association by subscribing to Setnor Byer’s risk management news brief.

Condominium Associations Must Go Green Under Florida’s New EV Charging Station Law

Do unit owners have the right to install electric vehicle (EV) charging stations in their reserved parking spaces? In the past, Florida condominium associations essentially had the power to answer this question as they saw fit. Not anymore.

As of July 1, 2018, unit owners may not be prohibited from installing EV charging stations within the boundaries of their limited common element parking areas. According to the Florida Legislature, the participation of condominium associations in the “green movement” is essential to conserving and protecting the state’s environmental resources.

Under the amended statute, unit owners have an implied easement across the common elements to install compliant EV charging stations and furnish electrical power. However, the amended statute also includes specific requirements governing the installation of charging stations.

  • The installation may not cause irreparable damage to condominium property.
  • The electricity must be separately metered and paid by the unit owner.
  • Unit owners must pay for installation, operation, maintenance, and repair.
  • Unit owners must purchase hazard and liability insurance to cover the charging station.
  • Unit owners or their successors must pay to remove charging stations.

An association may use its statutory rights to enforce payment of costs associated with EV charging stations. Associations can also require unit owners installing charging stations to:

  • Comply with bona fide safety requirements and applicable building codes;
  • Comply with reasonable architectural standards adopted by the association (dimensions, placement, external appearance), provided they do not prohibit or substantially increase the cost of installation;
  • Hire licensed, registered and experienced electrical contractors or engineers;
  • Provide a certificate of insurance naming the association as an additional insured on the owner’s insurance policy for any claim related to the EV charging station within 14 days after receiving installation approval from the association; and
  • Reimburse the association for the actual cost of any increased insurance premium amount attributable to the EV charging stations within 14 days after receiving the association’s insurance premium invoice.

The Condominium Act’s lien statute was also amended to clarify that labor performed or materials furnished for the installation of an EV charging station may not be the basis for filing a construction lien against the association. These liens must be filed against the unit owner.

To ensure compliance under the amended statute, condominium associations should consult with licensed professionals prior to taking any action that may affect a unit owner’s new right to install an EV charging station. Setnor Byer Insurance & Risk is available to discuss ways to identify, manage and insure the risks facing condominium associations and their board members.

Clients of Setnor Byer’s Condominium Insurance Programs enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Report Line, and our New Board Member Education Certification training, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

You can receive regular updates about developments that may affect your association by subscribing to Setnor Byer Insurance & Risk’s risk management news brief.

Florida’s Amended Estoppel Certificate Statute: Is Your Condominium Association Compliant?

The ability to efficiently buy and sell units is the hallmark of a healthy condominium community. The association’s role in this process has long been to issue estoppel certificates to prospective purchasers. However, pursuant to a recent statutory amendment, the manner in which associations are required to handle estoppel certificates has changed.

Estoppel certificates are generally used to certify amounts owed or due to the association for a specific unit as of a specified date. Potential purchasers use them to find out how much money would actually need to be paid to the association if they chose to buy the unit.

Are estoppel certificates really that important? Yes! An association generally waives the right to collect any amounts of money that are not specified in an estoppel certificate. They need to be prepared properly and accurately.

As of July 1, 2017, associations are required to issue estoppel certificates within 10 business days after receiving a written or electronic request. Certificates can be completed by any board member or authorized representative, but each association must designate on its website the person or entity responsible for receiving certificate requests.

The amended statute identifies specific information that must be included in estoppel certificates, including:

  • The date of issuance;
  • Names of unit owner and unit designations (including parking spaces);
  • Attorney’s name and contact information if account turned over for collections;
  • The preparation fee; and
  • The name of the requestor.

Estoppel Certificates must also include specific assessment information, including:

  • The amount and frequency of regular assessment.
  • The date through which regular assessments have been paid.
  • The due date and amount of the next regular assessment.
  • An itemized list of all moneys currently owed to the association (regular and special assessments, etc.) and moneys scheduled to become due during the effective period of the certificate. (The effective period is 30 days if delivered by hand or electronically and 35 days if sent by regular mail.)

The amended statute also requires estoppel certificates to include other information, including information about:

  • Fees (capital contribution, resale, transfer, other);
  • Open rule or regulation violations;
  • Board approval requirements for unit transfers;
  • Rights of first refusal; and
  • Insurance maintained by the association.

Under the amended statute, an association may charge a reasonable fee of up to $250 ($400 if the unit has delinquencies) for preparing and delivering estoppel certificates. An expedited request fee of $100 can also be charged for certificates that are delivered within 3 business days.

If certificates are requested for multiple units owned by the same owner and there are no delinquencies, the total fee charged by the association may not exceed, in the aggregate:

  • $750 for 25 or fewer units
  • $1,000 for 26 to 50 units
  • $1,500 for 51 to 100 units
  • $2,500 for more than 100 units

Given the very specific requirements under the amended statute, including those discussed in this article, associations should consult with a professional to ensure processes and procedures for estoppel certificates are compliant.

Setnor Byer Insurance & Risk is available to discuss ways to identify, manage and insure the risks facing condominium associations and their board members.

Clients of Setnor Byer’s Condominium Insurance Programs enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Report Line, and our New Board Member Education Certification training, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

To receive regular updates about developments which may affect your association, subscribe to Setnor Byer Insurance & Risk’s weekly risk management news brief.

Keep Conflicts of Interest Out of the Condominium Association Board Room

Condominium board members are required by law to act in the best interests of the association and the unit owners. Unfortunately, this duty of loyalty can be compromised by conflicts of interest. Even the appearance of conflicting interests can cause unit owners to lose faith and trust in the board. This cannot happen.

There are a number of statutory requirements that are designed to prevent harmful conflicts of interest. For example, Florida’s Condominium Act requires association contracts for maintenance or management services to disclose any financial or ownership interest a board member has with the contracting party.

There is an even broader obligation that applies to “any contract or other transaction between an association and one or more of its directors or any other corporation, firm, association, or entity in which one or more of its directors are directors or officers or are financially interested.”

If an association enters into any contract or transaction involving a potentially conflicting relationship or interest, then:

  • The relationship or interest must be disclosed or known to the board of directors or committee which authorizes, approves, or ratifies the contract or transaction by a vote that does not count the votes of such interested directors;
  • The relationship or interest must be disclosed or known to the members entitled to vote on such contract or transaction, if any, and they authorize, approve, or ratify it by vote or written consent; or
  • The contract or transaction must be fair and reasonable as to the corporation at the time it is authorized by the board, a committee or the members.

These disclosures must be entered into the written minutes of the meeting. The contract or transaction must also be approved by an affirmative vote of two-thirds of present directors.

The purpose of these requirements is to make sure no one uses their position as a board member to profit or gain at the expense of the association. More often than not, if a board member hides his or her potentially conflicting interest in an association contract or transaction, it is because they are putting their own interests ahead of the association’s interests.

Please contact us if you would like to learn more about effective condominium management.

Clients of Setnor Byer’s Condominium Insurance Programs enjoy access to various risk management services, such as Setnor Byer’s Risk Management Group, Unit Owners’ Report Line, and our New Board Member Education Certification training, which has been approved by the Division of Florida Condominiums, Timeshares, and Mobile Homes.

To receive regular updates about developments which may affect your association, subscribe to Setnor Byer Insurance & Risk’s weekly risk management news brief.