Structural Integrity Reserve Notes – Not Authoritative.

Raw Notes This Page:

The Notes Below, and all content on this page are exploratory and preliminary
– DO NOT RELY –
on any information as useful for formulating any decisions, conclusions or as legal advice in any way.
This information is merely what i have obtained searching the web and attending seminars.  I HAVE NOT had the time to cross check, confirm or otherwise review it for accuracy.  Plus, I don’t listen well and make lots of mistakes 🙂

Caveat Emptor!

My Library:

conflicting info re  Over three stories or  Three stories or more

https://www.flsenate.gov/Committees/BillSummaries/2022D/html/2875″>https://www.flsenate.gov/Committees/BillSummaries/2022D/html/2875
or each building in the association that is three stories or more in height”
which leaves a discussion – “is a parking garage under a building a story?” or is a basement?

 

 

https://www.reserveadvisors.com/florida-structural-integrity-reserve-study-requirements/

 https://berylprojectengineering.com/structural-integrity-reserve-study/
 https://www.teamcomplete.com/home/structural-integrity-reserve-studies-sirs-2/
 

For authoritative legislation on the Florida Structural Integrity Reserve Study, you should refer to the Florida Statutes, specifically the section pertaining to condominiums and cooperative associations. As of my last update, the relevant legislation could be found under:

  • Chapter 718, Florida Statutes (The Condominium Act) for condominium associations.
  • Chapter 719, Florida Statutes (The Cooperative Act) for cooperative associations.

These chapters include requirements for reserve studies, maintenance, and structural integrity inspections for condominiums and cooperatives. Given the evolving nature of legislation, it’s important to check for any recent amendments or new laws related to structural integrity reserve studies.

For the most current and comprehensive information, you can access the Florida Statutes directly through the official website of the Florida Legislature (www.leg.state.fl.us) or consult the Division of Florida Condominiums, Timeshares, and Mobile Homes under the Florida Department of Business and Professional Regulation (DBPR). The DBPR website provides resources, guidance, and updates on laws and regulations affecting condominiums and cooperatives in Florida.

Additionally, for legal advice or interpretation of the legislation, consulting a legal professional specializing in Florida real estate or condominium law is advisable. They can provide detailed information and guidance tailored to specific situations or questions regarding structural integrity reserve studies and related legal requirements.

 What you need to know:

Who Needs One


Condominiums and cooperatives of 3-stories or more are required to conduct periodic structural integrity reserve studies


Qualifications


The visual inspection portion of the structural integrity reserve study or a verification of the SIRS must be conducted by a Reserve Specialist (RS), a Professional Reserve Analyst (PRA), or a Florida licensed Professional Engineer or Architect.

Frequency

An initial SIRS must be conducted by 12/31/2024 and updated every 10 years thereafter


Timelines


Associations existing prior to 7/1/2022 that are controlled by the unit owners have until 12/31/2024 to complete their initial structural integrity reserve study


Statutory Funding


Any budget adopted on or after December 31, 2024 requires that a SIRS be used as the basis for funding structural reserves.


An Official Record


The structural integrity reserve study is part of the association’s official record and must be held on to for 15 years


Fiduciary Obligations


Failure to comply with the structural integrity reserve study requirements is considered a breach of one’s fiduciary duty

My Library – Continued:  

 

Two Phases of a Structural Integrity Reserve Study (SIRS)

What Does Phase 1 and Phase 2 of a Structural Integrity Reserve Study Mean?

Phase 1 Milestone Inspection: A milestone Inspection is an initial visual inspection. This is done to determine the building’s basic structural integrity. A licensed structural engineer will inspect the building structure from top to bottom, and the engineer will identify any problems. The purpose of the required Milestone Inspection and report is to reasonably confirm that the building is safe for continual use under existing occupancy. Only if there are general safety and deterioration concerns, a Phase 2 inspection will need to be conducted.

Phase 2 Comprehensive Inspection: Phase 2 is a more detailed inspection of a building’s structural systems, including non-destructive testing and destructive testing (if necessary). The engineer will also review the building’s plans and specifications. The comprehensive inspection will identify any structural deficiencies and provide a plan for repair or replacement.

The SIRS report will include the findings of both the milestone inspection, the comprehensive inspection, and the funding plan for any necessary repairs or replacements.

 

From <https://berylprojectengineering.com/structural-integrity-reserve-study/>

Does an association’s reserve account have to have accumulated, by 2025, all of the funds necessary to account for the remaining useful life for each reserve component?

The Florida Department of Business and Professional Regulation states that funding obligations are dependent on the SIRS provider’s recommendation. This may or may not require full reserve funding by 2025. If an item does have some useful life remaining, you will likely not need to have all of the funds on hand by 2025. View our blog to understand the many definitions of “fully funded”

 

From <https://www.reserveadvisors.com/florida-structural-integrity-reserve-study-requirements/>

 

What if we can’t meet the funding recommendations outlined in our structural integrity reserve study?

Any budget adopted on or after December 31, 2024 requires that a SIRS be used as the basis for funding structural reserves. Funding recommendations outlined in a study are the direct result of near-term project needs and the existing reserve balance. While the law specifically states that the association must attain the annual funding level set forth in the structural integrity reserve study, there may be cases where it is difficult if not impossible to do so without the use of additional assessments. We encourage you to meet with your provider to review their recommendations and any alternate options that may be available, which may or may not alleviate the ability to attain appropriate funding levels. In the event your association is still unable to meet its funding obligations, we encourage you to consult with legal counsel to better understand the risk associated with being non-compliant.

 

From <https://www.reserveadvisors.com/florida-structural-integrity-reserve-study-requirements/>

 

What information do we need to provide when registering our association with the state?

Florida Statute 718 requires registration with the Bureau of Compliance. Associations existing on or before 7/1/2022 are required to register with the Bureau of Compliance by 12/31/2022. The association needs to inform the local Bureau of 1) the number of buildings within the condominium associations that are three-or-more stories tall, 2) the total number of units in all such buildings, 3) the addresses of all such buildings, and 4) the counties in which all such buildings are located. Contact the Bureau today.

 

From <https://www.reserveadvisors.com/florida-structural-integrity-reserve-study-requirements/>

 

If the SIRS Engineer or Architect does not note an issue with any particular component, do we still need to reserve for it?

The DBPR will rely on the SIRS to determine which components need to be reserved for. Reserves do not need to be maintained for components for which the remaining useful life can not be ascertained or exceeds 25 years.

 

From <https://www.reserveadvisors.com/florida-structural-integrity-reserve-study-requirements/>

 

 

 

 

·         Hold vs. Sell: Have you been following the mandates for Fl Structural Integrity Reserve Study & Funding Requirements?
Just in case you haven’t had a recent briefing, below is a note we use to provide information in this area, attached is a new related disclosure for sellers and buyers..

How Condos are sold in Florida has already started to change:  The standard Condo Rider Addendum to the sale and purchase contract now has added a section acknowledging Buyer has received a Milestone Inspection Report and Structural Integrity Reserve Study, Fannie Mae has added a nationwide Condo questionnaire which will be required for all borrowers, lenders and insurers are currently changing their underwriting guidelines to accommodate the changing landscape.

A few examples of these new requirements:

1.       Associations will be required to fully fund reserves for structural elements  – where to date, they have been able to have a majority vote to waive the funding and keep maintenance fees lower.
The new requirement is intended to ensure that there are reserve savings to cover required maintenance, repair and replacement at end of life of structural elements.  The “here and now impact” up until the 2025 deadline is unknown, but feared to mean monthly Association fees may increase significantly and fear of this unknown may effect condo prices.

2.       Associations of greater than 3 floors and of age are required to complete a Structural Integrity Reserve Study by December  2025.  This starts as a visual non-invasive (is the building “structurally sound?”) and if concerns are raised, proceeds to include destructive testing, mitigation, remediation and repair plans – and a timeline and a budget with required funding to accomplish the necessary repairs.

We are providing this information because it will help us do a few  things:

3.       Hold & Rent  versus Sell Strategy and Timing Assessment
We want you to be informed so you can best weigh any risks associated with ownership.

4.       Limit your Liability by making sure the documentation you provide  in support of a sale is up to date and accurate.

5.       Pre-Plan the Sale.  We’ll assist you to accurately complete the Sellers Package for your RBC unit – which is the information we are required to provide, and/or buyers and their lender will require to complete the purchase of your unit. Having this prepared in advance will ensure that we do not stress and possibly lose a buyer who has a limited window of time to confirm Association and property status without risk of losing their deposit.

6.       Current Association Disclosures.  We assist you to obtain an up to date current status of the RBC Association so that you have a clear understanding of Association stability and / or  risks in finance, reserves, structures, litigation.

a.       Most owners  have no awareness of any litigation, and recent developments regarding BricMcmann and possible punitive damage allowances before the Tampa Court are also important to understand.

https://berylprojectengineering.com/structural-integrity-reserve-study/

https://www.fcapgroup.com/flcaj/flcaj-articles/structural-integrity-reserve-studies-from-the-inside-out/

Sample Letter to Seller:

The MLS FL STate Panel I attended: 

DESCRIPTION

The newly enacted Condo Structural
Milestone Inspection legislation is sure to have an impact on your real estate
or property management business. Join us for an insightful panel discussion as
our experts delve into the intricacies that impacts certain condominium
buildings*. By engaging with industry leaders, you will acquire valuable
insights, enabling you to navigate the new legislative landscape with
confidence and adapt your business practices accordingly.

Panel Members:

1.    Michael Wyckoff – PRO/CPRO President:
As the President of PRO/CPRO, Michael Wyckoff brings extensive knowledge and
experience in the real estate industry. With a comprehensive understanding of
the legislation, he will shed light on its purpose, key provisions, and
potential challenges for industry professionals.

2.    David Reider, Esq. – Berlin Patten Ebling, PLLC:
David Rider, a seasoned attorney at Berlin Patten Ebling, PLLC, specializes in
real estate law. With his legal expertise, Mr. Rider will explore the legal
implications of the Condo Structural Milestone Inspection legislation, offering
guidance on compliance, contractual obligations, and potential legal
ramifications.

3.    Trey Goldman – Florida Realtors®  :
Trey Goldman, a prominent figure in the Florida Realtors® community, will
discuss the impact of the legislation on the real estate market. As a
representative of the real estate industry, Mr. Goldman will provide insights
into how this legislation might influence property values, sales transactions,
and disclosure requirements for real estate agents.

4.    Maureen Conley – First Service:
Maureen Conley, an industry expert from First Service, will focus on the
operational aspects of the legislation. Drawing on her experience in property
management, Ms. Conley will address the practical implications for property
managers, including inspection procedures, maintenance requirements, and
potential effects on homeowners’ associations.

5.    Leo Cannon, PE – Beryl Engineering:
Leo Cannon, a highly regarded professional engineer from Beryl Engineering,
will offer a technical perspective on the Condo Structural Milestone Inspection
legislation. As an expert in structural engineering, Mr. Cannon will discuss
the engineering aspects of the legislation, emphasizing the importance of
maintaining structural integrity, identifying potential risks, and ensuring
compliance with safety standards.

* Buildings that are three stories or
taller and built before 1992, or located within three miles of the coast and
built before 1997.

About the Panelists

Michael Wyckoff. As a
career real estate broker, Mr. Wyckoff has worked in Tampa Bay’s real estate
market for 31 years. He holds a Bachelor of Science degree in marketing from
Florida State University. Building a foundation for his real estate career, he
worked for a franchised real estate firm, and became a trainer for the
franchise. Mr. Wyckoff earned his Florida Real Estate Instructor’s license in
1993. He is currently the Managing Broker/Owner of Engel & Völkers Madeira
Beach and Engel & Völkers South Tampa and is a member of the prestigious
Private Office within the global network of Engel & Völkers Advisors. Mr.
Wyckoff holds the followingdesignations:  GRI – Graduate Realtor
Institute, CRB – Council Real Estate Brokerage Managers – CNE – Certified
Negotiation Expert.  Michael is currently the chairman of the Madeira
Beach Planning Commission and sits on several boards of directors for local
charitable organizations

David Reider, Esq. grew
up in Pinellas County, Florida before graduating with a B.A. in History and a
Master’s in Public Health from the University of South Florida in addition to a
B.S. in Microbiology from the University of Florida. After attending New York
Law School and earning a Public Service Certificate for his community service
during law school, David returned to St. Petersburg and quickly settled into a
career in Real Estate Law. David is licensed to practice law in the State of
Florida as well as the State of Illinois and practiced in the United States
District Courts for the Middle District of Florida and the Southern District of
Florida. He is an active member in both the American Bar Association’s Real
Property, Trust and Estate Law Division and the Hillsborough County Bar
Association’s Real Property, Trust and Estates Section. With over a decade of
experience handling real estate transactions and litigation work throughout the
state of Florida as well as his work as a licensed Realtor prior to joining
Berlin Patten Ebling, David offers a wealth of expertise in the areas of
commercial and residential real property transactions. 

Beyond his legal expertise, David volunteered as a
supervisor with the American Red Cross Disaster Action Team and provided
consulting services to humanitarian and healthcare related projects such as an
emergency response plan for a hospital in Eswatini, Africa. In his free time,
David can be found playingin various bands or on the ice rink and soccer fields
throughout the Tampa Bay area. He also enjoys spending time in downtown St Pete
with his wife, son, and dog, Wrigley.

Trey Goldman is
Legislative Counsel for the Florida Realtors®. He participates in all their
legislative and regulatory efforts, and represents Realtors® before the Florida
Legislature, state regulatory agencies, the Governor’s office, and the Cabinet,
with a focus on insurance and community association related issues. Trey is
also a member of the Florida Bar and serves on the Executive Council of the
Bar’s largest section, the Real Property, Probate and Trust Law Section. Trey
was raised in Daytona Beach, Florida, where both of his parents were Realtors®,
and graduated from the University of Florida College of Business with a degree
in Real Estate and Urban Analysis. He also received his J.D. from the
University of Florida College of Law.

Maureen Connolly serves
as Vice President of FirstService Residential’s Central Florida market, where
she is responsible for the overall operation of communities in Tampa, St.
Petersburg, and Sarasota. Maureen joined FirstService Residential in 2006,
bringing more than two decades of community management experience with her. She
is a Licensed Community Association Manager (CAM) and Realtor® and holds a
Leadership in Energy and Environmental Design Green Associate (LEED)
certification. She is a Certified Manager of Community Associations (CMCA), and
an Association Management Specialist (AMS). Prior to joining FirstService
Residential, Maureen was Vice President of a real estate company. 

Richard “Leo”n Cannyn,
PMP, P.E. Cannyn earned a bachelor’s degree in Chemical Engineering, and a
Master’s of Business Administration from Florida Institute of Technology. He
received a Master’s degree in Organizational Management/Psychology from the
University of Phoenix. Cannyn holds a State of Florida license in Professional
Engineering, Home Inspection, Certified Mold Assessor, Certified Mold
Remediator, Wood Destroying Organism (“WDO”) Inspector and is Certified as a
Reserve Specialist (RS) by the Community Associations Institute. Cannyn is also
a Certified Master Inspector through the Master Inspector Certification Board
and an Envision Sustainability Professional from the Institute of Sustainable
Infrastructure.

Cannyn brings twenty plus years of experience in planning, implementing, and
overseeing capital projects for condominiums, municipalities and state
agencies. Notable projects included managing the contract administration of a
456-condominium restoration program, a $130 million water plant, and a $14
million dollar prison expansion while performing visual inspections for civil,
structural, mechanical, plumbing and electrical systems.

 

My Notes from the above panel:

 

Panel Discussion: Implications of FL’s New
Structural Milestone Inspection Law

 

 

Keith and I have important information to share with  you and suggested language for you to request from the XXX Property Manager.  This is as a result of our recently  attending a Professional Realtor Development Panel Discussion attended by 100+ local realtors from multiple brokerages on the: Implications of FL’s New Structural Milestone Inspection Law, led by five of the most experienced subject experts in Florida (including an attorney, a State level Real Estate lobbyist, Professional Structural Engineer) – their profiles are below as an fyi.

Back to the topic 😊 That in response to the collapse of the Surfside building and death of 98 people, Florida has enacted several new legal requirements for Associations.  Which the panel  asserted will “Unquestionably make living in a condo more expensive”.   External Professional Structural Engineers and Certified Reserve Specialists will have to be hired, studies completed, structural reserves funded and repairs contracted. 

How Condos are sold in Florida has already started to change:  The standard Condo Rider Addendum to the sale and purchase contract now has added a section acknowledging Buyer has received a Milestone Inspection Report and Structural Integrity Reserve Study, Fannie Mae has added a nationwide Condo questionnaire which will be required for all borrowers, lenders and insurers are currently changing their underwriting guidelines to accommodate the changing landscape.


A few examples of these new requirements:

  1. Associations will be required to fully fund reserves for structural elements  –
    where to date, they have been able to have a majority vote to waive the
    funding and keep maintenance fees lower.  The new requirement is intended to ensure that there are reserve savings to cover required maintenance, repair and replacement at end of life of structural elements.  The “here and now impact” up until the 2025 deadline is unknown, but feared to mean monthly Association fees may increase significantly and fear of this unknown may effect condo prices.
  2. Associations of greater than 3 floors (note – revised in other discussions to be 3 floors or more) and of age are required to complete a Structural Integrity Reserve Study by December  2025.  This starts as a
    visual non-invasive (is the building “structurally sound?”) and if concerns are raised, proceeds to include destructive testing, mitigation, remediation and repair plans – and a timeline and a budget with required funding to accomplish the necessary repairs.

 

We are providing this information because it will help us do a few  things:

  1. Limit your Liability by making sure the documentation you already provided is up to date, you provided some great documents and information which we have and need to return!, and that a few missing documents are requested from the Property Manager.
  2. Complete the Sellers Package for your XXX unit – which is the information we are required to provide, or buyers and their lender will require to complete the purchase of your unit. Having this prepared in  advance will ensure that we do not stress and possibly lose a buyer who has a limited window of time to confirm Association and property status without risk of losing their deposit.
  3. Provide you both an up to date current status of the XXX Association so that you
    have a clear understanding
    of Association stability and / or  risks in finance, reserves, structures, litigation.  This knowledge will help you better assess your hold versus sell strategy and timing. 
    1. You had mentioned no awareness of any litigation, and today in the elevator we saw a Board Meeting Notice for later this week that has an agenda item for “Settlement Agreement Presentation” – we are not sure which suit this pertains to, and believe it is relative to the XXX suit. This is an example of what we don’t want any buyer to later assert – that they had not received proper disclosure from you.

 As you know, the XXX Property Management company isXXX Property Management and the Association Manager  is XXXn xxxxx@rxxxepropertymgmt.com

Below is an email with  suggested requests that we’d like you as an owner to email to XXX  Of course, you can make it your own – as an owner you have the right to request and receive these elements.

First question though –
do you have access to the XXX Association Owner Portal?

It’s likely that this information is posted there.  If its difficult to find and download the information, you can consider creating a temporary password and we can download them for you.

If we can’t find the info on the Owner Portal – then the below email to XXX
is needed:  Doing this ASAP will be important as we have heard the Property Management company is changing in September and the closer that gets – the less likely current PM will have time and focus to assist.

Hi XXX,
We are XXX and YYYY, owners of CXXXX.  First a quick thank-you for your support of our Community.

We have looked on the owners portal for information important to us and have not found it there.  Can you please provide the requested documents (links or pdf’s are fine) and/or status to the below:

  1. Board Meeting Minutes – 12 months
  2. Treasurer Reports – past 3 months
  3. Current Year Budget & Reserve Statement
  4. Reserve Study, most recent
  5. Standard  “condo docs” for buyers: Rules & Regulations, Declaration of Condo with any recent amendments filed with State, Articles of Incorporation,  Bylaws and Rules, Most recent year end information, FAQ’s
  6. Summary Statement confirming
    1. What, if any, active or pending litigation the Association is facing?
    2. Has Association voted to forego retrofitting its fire sprinkler system or
      hand rails and guardrails for the units?
  7. We are aware of Florida’s new Structural Milestone Inspection Law which our Association must comply with by the required due dates.  We assume that Reserve Studies, Structural Integrity Reserve Study and the Executive Summary,  Milestone phase 1 and phase 2 inspections are likely to
    have been contracted if not underway or already completed.

    1. We request any available information and available copies of the above so we may be well informed owners.
    2. As we bring our unit to market for sale, various disclosures are required from us. 
      Can you please provide the Association statement (including if the Association has or has not completed a structural integrity study) that we can use to inform the buyer of our unit as to status in this area? 

We hope that as you have to support many owners and buyers that you have an up to
date summary approved by the Board and Legal to ensure we as owners and The
Association properly disclose any necessary information in the above areas and
any others you may recommend disclosing.
Thanks in advance for you assistance and support – and of course let us know if
we overlooked where in the owners portal this information may be available.

XXX

 

We know this is a lot of information to process and can certainly meet
to discuss or clarify any of the above.  Please don’t be alarmed
– the minutes, Budget and reserves are all standard
items to assemble for selling a home.  The new Legislation largely
requires Association actions between now and December 2025 – yet understanding
what those actions may trigger and the near term and long term out of pocket
expenses are important for you to know.  As you can see, many of the areas
legally required to disclose require the Board and Property Manager to
 provide their approved status and information.

 

Thanks so much for your
support and trust –

Yamil & Keith