Governor DeSantis​ Addresses Condo Improvement Law: Unintended Consequences​

During a press conference in Miami on July 25th, Florida Governor Ron DeSantis spoke to the need to address the unintended consequences of legislation passed to prevent tragedies such as the collapse of the Champlain Towers South condominium building in Surfside, Florida in 2021.

"If the legislators talk to their folks and have some proposals to provide some reforms that would alleviate some of that burden, I think that that would be a welcome thing, said DeSantis. "But that's going to have to be something that they're developing after talking with the folks who are affected by it. But I absolutely see that as probably an unintended consequence, although not necessarily unforeseen. Because when you're doing this, there's a lot of moving parts that happen."The main law in question is SB 4-D, which was passed in 2022 and mandates structural inspections for condos of three stories or more and requires condo associations to fully fund reserves for repairs. SB 4-D does not allow waivers or extended delays in fully funding these reserves. However, older condos in Florida are facing high repair costs, resulting in substantial special assessment bills for homeowners, who are the only source of funding for these mandated repairs.

Consequently, many owners of older condos are putting their properties up for sale. Potential unit buyers are opting to consider only newer condos due to the uncertain liabilities associated with these older properties.  Redevelopment of these older condos is further complicated by a March 2024 Florida Third District Court of Appeals decision in the case of Angelica Avila, et al. v. Biscayne 21 Condominium, Inc., etc., et al., which requires developers to obtain 100% homeowner approval before the condo association can be dissolved. This case is expected to be appealed to the Florida Supreme Court.

This perfect storm of events has led to a lopsided market, with over ninety percent of available condo inventories being older ones that aren't selling.If you are facing ramifications from SB 4-D or as a developer we encourage you to contact your legislators and us to share your story.