The following is a summary of the recent legislative updates coming effective in 2023. This article is for general use only and should not be construed as legal advice. If you have questions about how this may impact your community association, we strongly encourage you to contact your management or legal professional partners for guidance.
Senate Bill 154:"Milestone and SIRS Glitch Bill"
Senate Bill 154, effective immediately, known as the "Milestone and SIRS Glitch Bill," addresses vital aspects of property inspection, reporting, and disclosure requirements. The bill's key features include the introduction of mandatory structural inspections termed "milestone inspections," updated definitions, inspection deadlines, disclosure requirements, and provisions aimed at safeguarding the structural integrity of buildings under condominium and cooperative ownership.
Mandatory Structural Inspections and Milestone Inspections: The bill clarifies the "milestone inspection." This term refers to a structural inspection of buildings that includes assessing the load-bearing elements within primary structural members and systems. Importantly, the term "walls" has been removed from the definition. This inspection must be conducted by licensed architects under Chapter 481 or engineers under Chapter 471. The goal is to evaluate the life-safety and adequacy of the building's structural components, ensuring its overall safety and identifying necessary maintenance, repairs, or replacements. Notably, this inspection does not encompass compliance with the Florida building or fire safety codes. A qualified team, including an architect or engineer as the registered design professional, may conduct the inspection, with all work and reports being signed and sealed by appropriate team members.
Substantial Structural Deterioration: The term "substantial structural deterioration" is newly defined to encompass significant structural distress or weakness that adversely affects a building's overall structural integrity and condition. This highlights the focus on maintaining the buildings' safety and stability over time.
Milestone Inspection Report Deadlines:The bill lays out detailed deadlines for milestone inspection reports:
Initial Deadlines: Owners of buildings that are three stories or higher and subject to condominium or cooperative ownership must have a milestone inspection by December 31st of the year the building turns 30 years old from its certificate of occupancy date. Subsequent inspections are required every 10 years thereafter. There are provisions for buildings reaching 30 years of age before and after specific dates.
Proximity to Saltwater: The local enforcement agency now has authority to determine whether local conditions, including proximity to saltwater, warrant an earlier milestone inspection. Buildings within three miles of the coastline may require the inspection by the year the building turns 25 years old.
Deadline Extension: Local enforcement agencies can grant extensions for the initial milestone inspection deadline if owners demonstrate good cause. This is particularly relevant when architectural or engineering contracts are in place but completion by the deadline is infeasible due to reasonable circumstances.
Milestone Inspection Reports Prior to July 1, 2022: Inspection reports conducted before this date may be accepted if they substantially comply with relevant requirements. These reports are considered milestone inspections for statutory compliance.
Mixed-Use and Condominium Hotels: Both condominium associations and non-condominium/cooperative owners share the responsibility for arranging the milestone inspection report for mixed-use buildings. Associations bear the costs related to maintenance of portions under their governance.
The stipulations outlined previously do not extend to single-family residences, duplexes, or triplexes that have three or fewer habitable stories above the ground
Governmental Notice and Phase One Inspection: Upon determination of a necessary milestone inspection, written notice is sent to associations and non-condominium/cooperative owners. Associations must notify unit owners within 14 days, after which phase one of the milestone inspection must be completed within 180 days of receipt of the local government notice.
Phase Two Inspection: If phase two is necessary, within 180 days after submitting phase one's report, the responsible architect or engineer must provide a progress report to the local enforcement agency, including a timeline for phase two completion.
Post Inspection Requirements: Upon completion of phase one and phase two milestone inspections, the architect or engineer must submit a sealed inspection report and a separate summary of significant findings and recommendations to the association and non-condominium/cooperative owners.
Disputes and Breach of Fiduciary Responsibility: The bill expands the definition of disputes to include various matters related to milestone inspection and structural integrity reserve studies. Officers or directors knowingly failing to complete a structural integrity reserve study breach their fiduciary relationship with unit owners.
"The goal is to evaluate the life-safety and adequacy of the building's structural components, ensuring its overall safety and identifying necessary maintenance, repairs, or replacements. "
Senate Bill 2A: Insurance
Effective March 1, 2023, Senate Bill 2A on insurance has introduced several significant changes to Florida's insurance regulations, primarily focusing on property insurance claims, reinsurance, claim processing timelines, and dispute resolution procedures.
Reinsurance: Florida insurance companies are now allowed to purchase hurricane reinsurance at reasonable near-market rates. This measure aims to prevent excessive increases in insurance premiums, thus providing financial relief to policyholders in case of catastrophic events like hurricanes.
Claim Filing and Processing:
Deadline Reductions: The time limit for filing a newly reopened claim has been reduced from two years to one year. Similarly, the timeframe for submitting a supplemental claim has been shortened from three years to 18 months.
Claim Payment: Insurance companies must now process and approve or deny claims within 60 days, down from the previous 90-day period.
Claim Acknowledgment: The time within which insurance companies are required to review and acknowledge receipt of a claim communication has been reduced from 14 days to seven days.
Claim Investigation: Insurance companies are now mandated to initiate their investigation into a claim within seven days, a decrease from the previous 14 days.
Physical Inspection: The duration allowed for insurance companies to perform physical inspections, including hurricane-related claims, has been shortened from 45 days to 30 days.
Electronic Methods: Insurance companies can now employ electronic methods for damage assessment, and policyholders have the option to participate in this process.
Adjuster Reports: Insurance companies are required to send the policyholder any adjuster report estimating the damage within seven days of its creation.
Undisputed Benefits: The timeframe for paying out undisputed benefits has been reduced from 90 days to 60 days.
Attorney's Fee Awards:
One-Way Attorney's Fees Eliminated: The provision related to one-way attorneys' fees in property insurance claims has been eliminated. Neither party is awarded prevailing party attorney’s fees, and each party is responsible for their own legal fees.
Offer of Judgment: An offer of judgment provision is introduced. If one party makes an offer and the other side doesn't exceed at least 125% of that offer during the trial, the prevailing party may still need to pay the other party's attorney's fees.
Assignment of Benefits: Effective January 1, 2023, post-loss insurance benefits cannot be assigned to a third party in residential and commercial property insurance policies. This effectively eliminates the practice of assignment of benefits in Florida.
Bad Faith Claims: Before pursuing a bad faith claim against a property insurance company, a court must first determine a breach of contract. Receiving a higher appraisal award than the insurance company's appraiser's final estimate might be considered evidence of bad faith, but it's not sufficient grounds for a bad faith claim on its own.
Flood Insurance: Citizens policyholders may be required to obtain flood insurance as a condition of coverage.
Mandatory Arbitration: Insurance companies can now offer policies with mandatory arbitration clauses for dispute resolution instead of litigation. Policies with binding arbitration must also offer a non-arbitration option, and a premium discount must be provided for policies with binding arbitration.
Senate Bill 360: Construction Defects
Effective April 1, 2023, the statute of limitations for construction defect claims now starts upon the issuance of a temporary certificate of occupancy, a certificate of occupancy, or a certificate of completion, whichever is issued first. The statute of repose has been reduced from 10 years to 7 years, starting from the same milestones. An exception is made for single-family homes used as developer model homes, where the clock starts upon the transfer of title to another party from the developer.
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