Senator’s bill would affect low-rise buildings far from ocean
By Ron Hurtibise South Florida Sun Sentinel
Christine Cordoso, a resident of the Sunrise Lakes Condominium, says her monthly maintenance fee is set to rise to $1,600 a month thanks to a new state law that requires full funding of reserves for repairs.
That’s in addition to her bill for taxes and insurance for her Phase IV condo unit, she said.
Cordoso was among about 60 unit owners who gathered at the Phase 4 clubhouse Friday morning to hear state Sen. Rosalind Osgood’s plan to exempt buildings like hers from requiring condo associations to fully fund reserves to pay for repairs that will be needed over 10 years.
“We take very good care of our building. We’re on fixed incomes,” she said. The coming fee hike, she said, is “too much.”
Osgood said she is submitting a bill that she is hoping will be sponsored on the House side by Republican representatives Hillary Cassel or Vicki Lopez that would alleviate requirements for buildings under six stories that are located away from the ocean to fully fund reserves by 2026.
That’s what residents of this sprawling 55-and-over community, with a majority of buildings three and four stories tall, wanted to hear. The Structural Integrity Reserve Study (SIRS) law required all condominium buildings three stories and higher that are at least 30 years old to undergo an intense safety inspection by the end of 2024 and ensure by 2026 that annual budgets include full funding of reserves to pay for deficiencies found in the inspections plus projected wear and tear over the coming decade.
The law, which also applies to buildings at least 25 years old that are within three miles of the coast, was enacted after the June 2021 collapse of the 12-story Champlain Towers South condominium in Surfside killed 98 people. An investigation determined that residents of the building routinely voted to waive the reserve funding requirement and put off structural repairs.
The SIRS requirement enacted by the Florida Legislature the following year eliminated the option to waive full funding of reserves, and many retired condo unit owners have since told their elected representatives that the new requirement creates a financial hardship, Osgood said.
“I agree that we can’t have buildings without inspections collapsing and falling in,” she said. “We can’t have HOA boards, condo boards, property management not doing maintenance, and not securing buildings. I agree with that. Our attempt is to make it realistic. I’m hearing from my constituents that they can’t meet the financial burden, which puts them in violation of the law and also potentially positions them to become homeless.”
Osgood said her bill, which an aide said would be filed in Tallahassee within a few days, will add “financial hardship” to the list of reasons associations will be allowed to delay compliance with the new law.
How well that will be received by the full Legislature remains to be seen. Gov. Ron DeSantis last fall signaled that he’s sympathetic to condo owners’ burdens and called for lawmakers to develop ideas to address it by the end of the year. But he stopped short of calling for a special session to modify the requirement while legislative leaders said they were willing to hold off until the regular session begins on March 3.
Sen. Jason Pizzo, a Democrat from Miami, in September criticized the notion that elderly condo owners can’t afford high cost hikes if in the past they voted to waive reserves that would have funded needed repairs or replacements.
Kelly Crittenberger, who manages Sunrise Lakes phases I, III and IV for Campbell Property Management, said after the meeting that the law does not require condo associations that are up to date with their maintenance to immediately collect all of the money needed for 10 years of repairs. Instead, he said, the law requires that annual budgets include funds for repairs as they come up.
While he could not cite an exact figure, he acknowledged that maintenance fees at the condo have doubled over the past four years.
Addressing confusion over the term “fully funded reserve,” the consulting firm Reserve Advisors explained on its website that a fully funded balance is the amount equal to the percentage of life that has been used up for whatever component must eventually be replaced.
“For example, let’s say you have a $10,000 roof that is three-quarters of the way through its useful life of 20 years,” the website says.” The fully funded balance in year 15 would be $7,500 (three-quarters of the total cost).”
Writing for the University of Florida’s online newsletter, Bill Hughes, research director of the college’s Bergstrom Real Estate Center, wrote that media reports that condo owners are facing “financial turmoil” or “crippling bills” are “misleading at best.”
Florida has more associations that are financially weak than any other state, he reported, while asserting that “properties that have been sufficiently maintained and hold adequate reserves for future structural repairs will face nothing but an increased disclosure of inspection reports and continued reserve funding.”
Still, Osgood said that Sunrise Lakes Phase IV residents sent more than 700 letters to DeSantis asking for help. She appeared at the clubhouse on Friday morning with fellow Sen. Barbara Sharief, who represents the eastern side of Broward County, as well as Sunrise Mayor Mike Ryan and District 5 Broward County School Board member Jeff Holness.
Osgood said that while the Sunrise tower collapse highlighted “the risk posed by aging infrastructure, insufficient structural maintenance and delayed repairs in high-rise condominiums,” too many residents of buildings not in danger of imminent collapse are being squeezed by inflation-fueled costs of insurance and normal maintenance.
“Some are selling their homes and just leaving,” she said, “while others are staying and struggling to find money they just don’t have.”
Ryan, the Sunrise mayor, said the inspection and funding requirement was creating “an existential crisis in retirement communities.”
“We do not have problems with four-story buildings collapsing here in Sunrise,” he said. “Yet all of you are being forced into reserves that have to be maintained. And it couldn’t come at a worse time, in combination with property insurance that continues to rise month after month, year after year. It is crushing our seniors.”
Ryan said the mandates are putting seniors at risk of homelessness and displacement. Hundreds of condo units are for sale in Sunrise, “but there’s no one here to buy.”
Tad Sodergren, a Phase IV resident, listed all of the expenses residents have faced over the last couple years. “We have just replaced all our roofs,” he said. “We also had elevators replaced and fire alarm systems enhanced to meet the requirements, which also was an added expense. These increases in just the past couple of years depleted whatever reserves we had. And yet, in spite of these expenses, we’re expected to have 100% by 2026.”
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at rhurtibise@sunsentinel.com.
Comments