•This bill also gives local authorities the ability to extend deadlines for the Milestone Inspection if the association shows good cause that it has engaged an architect or engineer to perform the milestone inspection, and that the inspection cannot reasonably be completed before the deadline.

• Local agencies would also be able to accept inspections or reports completed before July 1st, 2022, if the inspections or reports substantially comply with the requirements.

• Condo/co-op associations will be required to notify owners of a required milestone inspection within two weeks of receiving a written notice from their municipality.

• The modification of the bill further clarifies that for a mixed-ownership building, in which portions of the building are subject to the condominium or cooperative form of ownership, ALL owners within the building, whether their property is a condominium or cooperative or not, must share in the cost of the Milestone Inspection.

• SB154 dictates that the Florida Building Commission is required to establish by rule a building safety program to implement the Milestone Inspection requirements within the Florida Building Code by December 31st, 2024. This is to include: inspection criteria, testing protocols, standardized inspection and reporting forms, and record maintenance requirements for the local authority having jurisdiction. This will be an important step in creating uniformity across the state.

Structural Integrity Reserve Studies:

• SB 154 deleted two components from the required list of included items in the Structural Integrity Reserve Study (SIRS.) The omitted components were foundations and floors.

• Additionally, the new bill provided that the mandated Structural Integrity Reserve Study may recommend that No Reserve line item be required where the replacement cost or the remaining useful life of that identified structural component be indeterminate. This is an important distinction/clarification of the SIRS requirements. Some items, such as the foundation or slab, may require extensive forensic investigation to determine condition and remaining useful life. Without such expensive investigation, it is possible that neither the cost to replace, nor the timing for that component’s replacement might be required.

• Clarified that the SIRS recommendation must include a reserve funding schedule.

• Required that associations that are subject to the SIRS requirement base a budget adopted on or after January 1st, 2025, on the findings and recommendations of the association’s most recent SIRS.

• Clarified that reserves for replacement costs DO NOT need to be maintained for any item with an estimated remaining useful life of greater than 25 years. However, the SIRS may recommend that a deferred maintenance expense amount for each such item.

• Provided that reserve assessments may be adjusted for inflation.

• SB 154 also made it harder to prove that board members or officers had breached their fiduciary duties, by clarifying that they would have had to “willfully and knowingly” failed to complete a Structural Integrity Reserve Study for it to be a breach of their duties.

• Who is exempt from the SIRS Requirement?

o Single-family, two-family, or three-family dwellings with three or fewer habitable stories above ground; and

o Any portion or component of a building that has not been submitted to the condominium or cooperative form of ownership; or any portion or component of a building that is maintained by a party other than the condominium or cooperative association.

Funding of Reserves:

• Senate Bill 4-D required that Reserves be fully funded. It eliminated the HOA’s ability to vote to waive fully funding. The new Bill SB 154 provides for condo boards to waive the fully funding of financial reserves through the end of 2024, ONLY IF they secure a majority vote of the entire building’s voting interests. This is a significant change as prior to SB 154, HOAs could vote to only partially fund Reserves based on the voting of the members attending the condo association meeting. That number only requires a quorum to be in attendance for a valid vote to be held. In Florida, that threshold is 30% of the members, unless otherwise specified in the condominium documents. This new, much higher threshold will make the vote to waive fully funded reserves much more difficult to achieve.

• Additionally, SB 154 states for budgets passed that begin in 2025, where an HOA has secured alternative financing for a structural component, such as the replacement of a roof, they could elect to partially fund or not fund at all that item. Alternative funding could include a loan. (This is another important change which will hopefully help to alleviate the financial strain that the new regulations are causing across the state.)

• Excludes insurance premiums from the calculation which permits members to petition for a substitute budget should the budget result in monthly assessments that have increased by 115 percent or more. This too is important given the rapidly escalating costs of insurance.

• SB 154 also exempts unit owner policies from the requirement that all personal lines residential policies issued by the Citizens Property Insurance Corporation must include flood coverage.

Pre-sale Notifications:

The bill also provides additional presale notice requirements in contracts for sales of a unit by a developer or a non-developer. A developer and a non-developer must give a prospective buyer of a condominium or cooperative unit a copy of a turnover inspection report completed on or after July 1, 2023, if applicable, and a copy of the inspector-prepared summary of the milestone inspection, if applicable. This provision is similar to current contract notices to unit owners obligated to furnish certain governing documents to the prospective buyer of a unit more than three days before closing for sales by a non-developer or 15 days before closing for sales by a developer. A contract that does not conform to these notice requirements is voidable at the option of the purchaser prior to closing.