Exec: Aging condos like the one that fell in Surfside need financial watchdogs

FL House plan calls for more frequent scrutiny of structural defects

By: - February 10, 2022 12:49 pm

The Champlain Towers South condo ruins in Surfside. Credit: Miami Dade Fire and Rescue

Aging condos in Florida should be certified as safe every three years, not every 10 and certainly not every 40 as required in current law, said an executive with the finance company that warned of impending disaster before the June 2021 collapse of a 12-story condo in Surfside.

Ninety-eight people were killed in the disaster.

“We were part of the team of experts that tried to sound the alarm about what was going on in that property, but as we all now know, that message was received too late,” said Will Simons, president of the Miami-based regional office of Association Reserves, in testimony given Thursday to the House Committee on Pandemics and Public Emergencies.

Reserves are funds collected over time from homeowners in multi-residential housing to pay for necessary repairs and maintenance. In the collapse of the Champlain Towers South condo in Surfside, near Miami, investigators are looking into whether such funds were not properly collected and spent as needed to keep the 40-year-old building safe.

Simons testified that his company’s 2020 reserve study, which he said is the only one ever conducted on Champlain Towers, pointed to alarming discrepancies between what should have been spent on repairs and maintenance and how funds were spent instead.

“The bill proposes that reserve studies be conducted at least every 10 years, which is not nearly often enough,” Simons told the committee. “Waiting 10 years between updates will allow associations to drift off course financially, only to find out much too late that what they’ve been doing has not been enough.”

Proposed Committee Bill 22-03, shepherded by Committee Chair Daniel Perez, a Dade County Republican, calls for more frequent inspections and certifications of condos, with special focus on those within three miles of a coastline. But it fails to require review of condo associations’ financial health by experts in that field, Simons said.

In describing the bill, Perez said he wanted it to focus on review of structural deficiencies by engineers and architects. “That’s not the same as the budgeting and cash-flow skill set, a combination of building sciences and finance, to prepare reserve studies,” Simons countered.

PCB PPE 22-03 also calls for reports to be submitted to local building officials, unit owners and prospective buyers, among other things.

Several committee members said they want to see the bill strengthened further as it advances in the Legislature, and Perez said he is open to ideas. For now, they passed it as proposed, 17-0.

In the Senate, SB 1702  and SB  7042 contain similar measures and are advancing.

Meanwhile, Sen. Travis Hutson’s SB 736 moves in a different direction and has moved furthest in the legislative process. Hutson’s bill would allow homeowners only five years, rather than the current 10 years, to file claims against builders for “construction defects” in their homes. Homebuilders and contractors testifed in favor of the bill, saying it would curb lawsuits against them and hold down their insurance rates.

Update: Later Thursday, the Senate amended Hutson’s bill to reduce the time period for filing a defects claim to seven years rather than five.

In testimony on Jan. 13, a survivor of the Champlain Towers condo collapse and a representative of the Florida Homeowners Association denounced the bill, saying “latent” or long-term defects do not become evident for many years. Curtailing the time period will leave some builders with no liability and many homeowners with no recourse, they said in separate testimony.

“After such a horrific tragedy, we expect proposed bills that do the exact opposite of Senate Bill 736,” said Martin Langesfeld, whose sister and her husband died in the condo collapse. “The only ones benefiting from this bill are developers and insurance companies.”

Homeowners Association spokesman Rick Nutter itestified on Jan. 13: “[SB 736] will essentially make Florida the least consumer-friendly state in the nation, with this type of five-year bar that will absolutely prohibit a homeowner from any recourse on what’s typically their largest investment.”

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Laura Cassels
Laura Cassels

Laura Cassels is a reporter, former statehouse bureau chief, and former city editor. She is a classical pianist, a Florida State University graduate and proud alum of the Florida Flambeau, an independent college newspaper. Contact her at [email protected]

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