New Smyrna Beach Condo Sales and Information
Florida Condo Inspections
In recent years, the State of Florida passed legislation to ensure that "buildings are structurally sound so as to not pose a threat to the public health, safety, or welfare." There are two types of inspections that are required for buildings 30 years and older and that are 3 or more stories. See comments below that elaborate on the process of these and the disclosures required when selling a condo.
Milestone Inspections
Are sellers required to provide buyers a copy of the milestone inspection report?
YES. If a milestone report has been completed then sellers must provide buyers with a copy. In fact, buyers will sign a condominium rider that reads as follows:
MILESTONE INSPECTION REPORT SUMMARY: Pursuant to Section 718.503(2)(a)5, F.S., Buyer who has
entered into this Contract is entitled, at Sellerís expense, to receive from Seller, before the sale of the Property, a
copy of the inspector-prepared summary of the milestone inspection report, as described in Sections 553.899 and
718.301(4)(p), Florida Statutes, if (1) applicable and (2) the summary has been submitted to the Association.
(c) STRUCTURAL INTEGRITY RESERVE STUDY: Pursuant to Section 718.503(2)(a)6, F.S., Buyer who has entered
into this Contract is entitled, at Sellerís expense, to receive from Seller, before the sale of the Property, a copy of
the Associationís most recent structural integrity reserve study or a statement that the Association has not
completed a structural integrity reserve study.
What is a milestone inspection?
Milestone inspections on condominiums are to be performed if the condominium is 30 years or more, and must be performed every 10 years thereafter. Condos and co-ops that reached 30 years prior to July 1, 2022 must complete this requirement by December 31, 2024. An amendment changed the 25 year requirement for coastal condos to a blanket 30 years for all condos. The first step is the phase I inspection which inspects the structural integrity of the condo or co-op. This includes but is not limited to, primary structural components (for example loading bearing walls) and primary structural system. The purpose is to prevent major structural issues from becoming a risk to public safety. This is not a building code inspection. If major deficiencies are apparent, the condo will be flagger for phase II which is a far more in depth look at systems and structures and may include invasive research into required repairs. All repairs flagged for phase II must begin within 180 days.
Is it common for a condo to fail the Phase I milestone inspection?
As of writing this on October 23, 2024 I personally I have not seen a phase I report that was flagged for phase II. I primarily do business in the New Smyrna Beach area. I have however seen many complexes that were forced to assess for reserve contributions due to findings in the SIRS (Structural Integrity Reserve Study).
Structural Integrity Reserve Study (SIRS)
The structural integrity reserve study or SIRS, is performed to evaluate the reserves (cash held by association) for capital expenditures and deferred maintenance of condos and co-ops. This includes building painting, roof replacement, spalling or concrete restoration, or any maintenance expense greater than $10,000. Amount to be reserved is computed by estimated useful life and estimated replacement cost, see full language here on page 12. Associations are not required to reserve for items with an estimated useful life over 25 years unless recommended by the SIRS.
A SIRS is required for condos and co-ops every 10 years after the condos creation for building 3 or more stories in height. Associations that existed prior to July 1, 2022 must complete a SIRS by the December 31, 2024.
This legislation is still evolving and several amendments have been approved since it's inception. If you are concerned or have further questions I encourage you to read the full language and strikethrough of original language for clarification.
What is the likelihood of assessments after the initial SIRS is completed?
Obviously this will vary complex to complex, however I have seen in most cases some level of additional reserve contribution is required. Again, based on this area (New Smyrna Beach) I personally have seen most complexes with reserve deficiencies tack on assessments is different ways. Some associations vote to increase monthly dues, some opt for a quarterly assessment for a stated period of time, some will assess in a lump some. Whatever the case may be, the idea is to avoid maintenance becoming an ongoing and unaffordable issue for unit owners. There are many complexes that may not have to assess because they already carried very healthy reserves.
As a condo buyer you are entitled to meeting minutes and financials for a complex. I encourage all buyers to review as many meeting minutes as possible. The budget and the SIRS can be an overwhelming read for the lay person but the banter in a meeting will tell a lot more of the story and provide some insight on the direction of members.
DISCLAIMER
I am not an attorney, my experience in this matter is limited to what I am provided by owners and associations throughout condo and co-op transactions, as well as the forms that have been provided to REALTORS by Florida Realtors and Florida Bar. I have read the SB language and amendments which are always up for interpretation. This information is not to be relied on for sale or transfer of a condo or co-op, it is for general informational use only. I do not guarantee the accuracy of this information. Prospective purchasers and sellers should consult legal counsel if matters pertaining to their association are in question.