Roberto Blanch Quoted in Sun Sentinel Article on Impact of New Condo Legislation

Firm shareholder and board certified community association law expert Roberto C. Blanch was quoted extensively in the lead article at the top of the front page of the Sunday, June 29^th, edition of the South Florida Sun Sentinel.

The article, which appeared under the headline “Condo Law May Require Too Much for Some,” focused on the expected impact of the new state laws enacted under House Bill 913, which was passed unanimously by both chambers of the Florida Legislature and went into effect on Tuesday, July 1. The new legislative reforms were aimed at addressing the growing condominium affordability crisis stemming from the mandates for structural-integrity inspections and reserves enacted in response to the Champlain Towers South condominium collapse in Surfside in 2021.

The newspaper’s article reads:

. . . The legislation includes a long list of changes and tweaks regarding how elections and meetings are conducted, how improvements are financed, how loans can be approved, and what records must be maintained and where. It also tightens oversight by the state over association functions. . .

. . . Roberto Blanch, who practices community association law at the Siegfried Rivera law firm in Coral Gables, said a provision allowing unit owners to vote by email “did a decent enough job of describing how that might work” but left “questions that linger as to how effective that option is going to be and does it expose or provide opportunities for fraud in elections that were not really there before.”

A provision allowing associations “to kick the can down the road” by extending the deadline to complete their Structural Integrity Reserve Studies (SIRS) and fund their reserve does not address whether associations that already completed theirs can delay funding of their reserve, he said.

“Then the question becomes, did this legislation give you one more year of exemption from having to fund it? Or are you obligated to fund it?” he says. “Some people who have read the statute say, ‘Oh, you are rewarding the procrastinators while those people who acted diligently arguably have to fund their reserves.’”

One provision clarifies that milestone inspections and Structural Integrity Reserve Studies are only required if all three stories of a building are “habitable,” Blanch says. “But they didn’t include the word ‘habitable’ in every section that applies” to the inspection requirements, he said.

The attorneys also cite as potentially troublesome the provision that allows associations to finance their repairs and reserves with lines of credit or loans — if approved by a majority of voting interests.

“Then the question becomes, you know, are the banks really going to lend?” Blanch says. “And if you ask some that are in the lending industry, they might say that they’re reluctant to tie up some of their lending capacity by allowing condominium associations to indefinitely sign lines of credit on which they may or may not draw upon for x number of years.”. . .

. . . Blanch concurs that attracting a majority of voting interests could be difficult. Annual condominium board elections require ballots to be cast by 20% or eligible members, he said, and it’s often difficult to get that level of participation. . .

. . . Blanch says he worries that all of the technical requirements will make it harder to find volunteers to serve, unpaid, on boards.

“It gets to the point where the good directors and the good volunteers start, you know, scratching their heads and pondering whether it’s even worthwhile for them to be on the board,” he said. . .

Highlights of the New Legislation

Inspections and repairs:

• Associations can delay completion of its Structural Integrity Reserve Study (SIRS) until Dec. 31 of this year. Previously, the study was required by Dec. 31, 2024.
• Associations will be required to submit the status of their milestone inspections to the Florida Department of Business and Professional Regulation (DBPR) every year. DBPR, in turn, must provide the information to the Office of Program Policy Analysis and Government Accountability, which will compile a report for the Legislature.
• Milestone inspections are now required for condo buildings consisting of three or more habitable stories. This eliminates confusion over buildings with first floors that are not used for condo units.
• Licensed architects or engineers who bid to perform milestone inspections must disclose in writing any intent to bid on services that the inspection might recommend.
• Any licensed contractor or design professional submitting a bid to perform services recommended by a milestone inspection must disclose in writing any direct or indirect interest in the firm providing the milestone inspection.

Managers:

• Community association managers whose licenses are revoked will be barred from working as a manager for 10 years.
• If a community association manager proposes or enters into a contract worth more than $2,500 for goods or services with the association — or holds an interest in or is paid by a company that would provide services — the association must solicit multiple bids from other third-party providers. If a manager violates this requirement, the association may terminate the management contract.
• Associations must provide the name of their managers, hours of availability and a summary of duties on their websites.

Board meetings and records:

• Beginning on Jan. 1, condominiums with 25 or more units must post digital copies of official records on its websites. The threshold is currently 150 or more units.
• Governing boards may conduct meetings in person or by video conference. If conducted by video conference, the meeting notice must include a hyperlink and conference telephone number that unit owners can use to attend, as well as a physical location for unit owners who want to attend in person.
• Meetings conducted via video conference must be recorded, and the recordings must be maintained as official association records.
• Unit owner meetings, including annual meetings, can be conducted in person or via video conference. If the annual meeting is conducted via video conference, a quorum of the board must be physically present at a location where unit owners can attend in person. If the bylaws do not provide the location, the meeting must be held within 15 miles of the condominium property or within the same county.
• Unit owners may vote electronically during meetings conducted via video conference.
• Associations must maintain in their official records the minutes of all meetings of the association, governing board, any committees and the unit owners, as well as recordings of all meetings conducted by video conference, plus all bank statements, ledgers, and copies of all affidavits.
• Associations must post on their websites or make available for download within 30 days the minutes of all board meetings over the past 12 months, video recordings or hyperlinks to videos of any meeting conducted by video conference, and all affidavits required by Florida condo laws.
• In lieu of delivering financial reports to owners, associations can provide a notice that it will mail, hand deliver, or electronically deliver a copy to the unit owner within five days after receipt of the owner’s written request.
• The Department of Business and Professional Regulation is authorized to investigate and review completion of milestone inspections, required repairs, insurance policies or fidelity bonding for all persons who control or disperse funds, board member education requirements, and SIRS reporting requirements.
• Associations must provide to the department contact information for board members, total numbers of buildings, and the amount and purpose of association assessments.

Budgets and reserves:

• If a board proposes an annual budget that would require assessments against unit owners that exceed 115% of what was assessed the previous year, the board must simultaneously propose a substitute budget that excludes non-discretionary funding.
• Unit owners must be notified at least 14 days in advance that a substitute budget will be proposed.
• Required expenditures in reserve accounts must include items with deferred maintenance or replacement costs exceeding $25,000, and not $10,000 as is currently the case. Other required expenditures are roof replacement, building painting, and pavement resurfacing.
• Reserves can be waived if an association votes to terminate the condominium.
• Reserves for SIRS items can be funded by lines of credit or loans upon approval of a majority of the total voting interests.
• The line of credit or loan must be immediately available for access by the board without further approval by association members.
• The line of credit or loan must be included in the annual financial statement provided to unit owners and prospective purchasers.
• Boards may pause contributions to reserves without approval of a majority of members if a local building official declares the building uninhabitable due to a natural emergency.
• A majority of voting interests may vote to temporarily pause or reduce reserve funding for up to two years if an association has completed a milestone inspection within the previous two years. This will be allowed for budgets adopted on or before Dec. 31, 2028.
• To determine funding needs and to recommend a reserve funding plan, associations that paused reserve funding must compete a SIRS before resuming reserve funding.
• Associations must obtain an updated SIRS before adopting any budget in which reserve funding does not align with the funding plan from the most recent SIRS.
• If any portion of the facilities are shared, associations must receive a complete financial report of all costs for maintaining the shared facilities within 60 days after the end of each fiscal year. They also have 60 days after receiving the report to challenge how those costs are apportioned.

Investments

• Boards must use best efforts to make prudent investment decisions that carefully consider risk and return in an effort to maximize returns on invested funds.
• Investments of reserve funds in one or any combination of certificates of deposit or in depository accounts at a community bank, savings bank, commercial bank, savings and loan, or credit union can be made without a vote of the unit owners.

Elections

• Associations must adopt a resolution for electronic voting during the next election if at least 25% of the voting interests petition for it within 180 days after the last scheduled meeting.
• Associations must designate an email address for receipt of electronically submitted ballots unless the association has adopted other lawful methods of electronic voting.
• Associations are required to count ballots transmitted electronically.

Hurricane protection

• — Assessments against unit owners are prohibited if the association removes or reinstalls hurricane protections such as windows and doors that would otherwise be the unit owner’s responsibility.
• Evacuation of a condominium property is required in the event of any evacuation order, and not only a mandatory evacuation order.
• Every condo association must provide adequate property insurance regardless of what the declaration says.

Our firm salutes Roberto for sharing his insights on several facets of these major new legislative reforms with the readers of the South Florida Sun Sentinel.  Click here to read the complete article in the newspaper’s website.

Our firm’s South Florida community association attorneys write about important matters for associations in this blog and our Miami Herald column, which appears every two weeks on Sundays, and we encourage association directors, members and property managers to click here and subscribe to our newsletter to receive our future articles.