Task Force Organized by the Florida Bar Delivers Report to Gov. DeSantis Following Surfside
A task force created to examine Florida’s condominium law after the June building collapse in the Miami area that left 98 dead is calling for legislative changes that include stricter requirements for condo associations to maintain cash reserves, according to a report reviewed by The Wall Street Journal.
The task force, organized by the Florida Bar, delivered the report Tuesday to Gov. Ron DeSantis and leaders of the Florida House and Senate, said Bill Sklar, head of the group. State lawmakers, who are scheduled to begin their legislative session in January, previously have said they plan to consider numerous proposals.
A spokeswoman for Florida Housespeaker, Chris Sprowls, said his office had received the report but hadn't reviewed it yet. The Speaker welcomes the Bar's input she said. A spokeswoman for Mr. DeSantis said his office couldn't comment until it had an opporutnity to study the report. In the year's proceeding the Champlaign Towers South collapse, condo board members and unit owners argued over needed upkeep and the mounting pricetag, which reached 16 million dollars. At the time of the collapse, the condo board was planning major repairs.
Article Reposted from Task Force Recommends Changes After Surfside, Fla., Condo Collapse - WSJ, By: Rachael Levy and Arian Campo-Flores
For background, on July 29, 2021, the Florida Bar published the following article written by Jim Ash.
CONDOMINIUM LAW AND POLICY ON LIFE SAFETY TASK FORCE WORKING ON RECOMMENDATIONS
'The task force is looking at all areas of not only condominium law, but other laws effecting the development, operation, and governance of condominiums and condominium associations'
THE REAL PROPERTY, PROBATE AND TRUST LAW SECTION Condominium Law and Policy on Life Safety Task Force has been meeting weekly since July 6 with the goal of determining “if there are any amendments or changes to the existing law that would either prevent or minimize the likelihood of another tragedy like Surfside Champlain Towers South.” This photo was taken by the Israel Defense Forces, which sent a search and rescue team to help in the aftermath of the collapse, and released to public domain by the Israeli Defense Forces Spokesperson’s Unit.
A Real Property, Probate and Trust Law Section task force formed in the wake of the Surfside condominium collapse expects to have a series of recommendations for Gov. Ron DeSantis and lawmakers by no later than October.
William Sklar, chair of the Condominium Law and Policy on Life Safety Task Force, says the panel has been meeting weekly since July 6, and despite a challenging timeline, intends to be thorough.
While it’s too early to predict what the task force will recommend, William Sklar identified several focus areas, including how condominium boards function, manage their reserves, communicate with residents, and education.
“The task force is looking at all areas of not only condominium law, but other laws affecting the development, operation, and governance of condominiums and condominium associations,” Sklar said.
The task force was formed, in conjunction with section leadership, by the Condominium and Planned Development Committee, which Sklar chaired for seven years until July 1.
The goal is to determine “if there are any amendments or changes to the existing law that would either prevent or minimize the likelihood of another tragedy like Surfside Champlain Towers South,” Sklar said.
The task force set a 90-day deadline so its recommendations would be available for interim committee meetings ahead of the January legislative session.
Of counsel with Carlton Fields, Sklar is board certified in real estate and condominium and planned development law and an adjunct professor at the University of Miami School of Law, where he directs the Ralph E. Boyer Institute on Condominium & Cluster Development.
The task force has been consulting with regulators at the Department of Business and Professional Regulation and the Office of Insurance Regulation, and is soliciting input from professional groups, including the Florida Association of Structural Engineers, the Florida Association of Building Officials, and others, Sklar said.
It’s too early to predict what the task force will recommend, but Sklar identified several focus areas, including how condominium boards function, manage their reserves, communicate with residents, and education.
The task force doesn’t intend to study building codes, but it will look at related issues, Sklar said, including a state statute that requires condominiums in Miami-Dade and Broward counties to be reinspected after 40 years.
The task force was recently given figures that show there are more than 912,000 condominium units in Florida that are 30 years or older, and they are home to more than 2 million residents, Sklar said.
“I want to believe, and most people on the task force do believe, that the vast majority of those condominiums are probably well maintained, and well governed, but we can’t leave it to chance, as there is no statewide inspection standard for aging condominiums,” Sklar said.
Recommending a statewide recertification schedule would raise additional questions, Sklar said.
“I don’t want to be presumptuous, but. . . should it be 40 years? Why not 20 or 25 years, and each 10 years thereafter?”
The task force would also likely look at the content of the inspection report and the qualifications of its authors, Sklar said.
“Should it be expanded to such things as plumbing and electrical, elevators, and mechanical?” he said. “That’s not really covered in those recertifications. And then the question is, who’s performing it?”
Another issue is how the results are communicated to residents, Sklar said.
“Should it not be transparently given to all the unit owners, so they know about it and make their own determination and also disclose it to buyers?” he said. “Hopefully it says that the condo is in great shape, and they would be pleased to, but if there are problems, let’s find out what’s involved and what are the costs to remediate.”
Condominium association governance has come under intense scrutiny since the 136-unit oceanfront high rise collapsed, killing 98 people. According to news reports, the volunteer board that served Champlain Towers South suffered from high turnover and had recently been given an engineering estimate for $15 million in repairs.
Condominium boards in Florida are required by law to produce an annual budget and to fund reserves, but the reserves can be waived.
The task force will look closely at governance issues, Sklar said.
“Some feel this whole notion of reserves is fundamentally flawed,” Sklar said. “Under our current statute, it only mentions reroofing, repainting, weather proofing and resurfacing driveways or asphalt and things like that, and any other items over $10,000 — but that’s left to the discretion of the board,” Sklar said.
Most condominium boards are made up of volunteers, but they often lack expertise and incentives to maintain adequate reserves, Sklar said.
“People who serve on boards are, for the vast majority, well-intended, community minded neighbors who want to do the right thing for the benefit of the community and their mutual property values,” Sklar said. “But they’re not professional engineers, they’re not insurance experts, most of them are not lawyers, and they’re not property managers.”
Striking the right balance could be a challenge, Sklar said.
“Now, we’re not trying to increase the cost of running these associations, but there’s a definite gap there, and we’re looking at the professionalization of governance and management of condominium associations.”
One of the biggest obstacles is human nature, Sklar said.
Boards serving older communities face what condominium law experts refer to as “green banana syndrome,” Sklar said, a reference to the joke about being too old to buy green bananas.
“Why should I be pumping up reserves for reroofing, repaving, and something else that might be necessary in the next 20 years, when I might be 100?” he said.
Since the tragedy, some news reports have pointed to the state’s Division of Condominiums, Time Shares, and Mobile Homes, an arm of the Department of Business and Professional Regulation, relative shoestring budgets.
Sklar said the division is supported by a $4 surtax that raises much more than the $6 million lawmakers appropriate for division overhead. But trust fund sweeps are a typical budget-balancing exercise, Sklar said.
“That’s not a criticism, the same thing happens to the Sadowski money for affordable housing,” Sklar said. “But yes, that is something that has to be looked at.”
The RPPTL section’s contribution won’t stop with the task force recommendations, Sklar said.
About a month before the tragedy, when he was still chair, the Condominium and Planned Development Committee was approached by state regulators and “asked to co-sponsor and co-present an educational series for not only board members but also for all condo unit owners around the state,” Sklar said.
The effort has been slowed by the pandemic, but is ongoing, he said.
“Many of these unit owners don’t understand what their obligations are, and don’t understand what these assessments are going for, and why they’re paying these amounts of money, and don’t understand exactly what the association does,” Sklar said.
When the task force completes its recommendations, Sklar said he and its members expect to continue working with the governor and legislative leaders.
“It’s not just handing over a nice little book with a well-written narrative, and nicely footnoted or indexed,” he said. “We want to follow through and work with them collaboratively.”