Just when you think it’s hopeless, there is a sliver of hope. The special session of the Florida Legislature is finally getting some changes on the books related to condominium recertification and homeowner’s insurance, all in the same week.
The special session called by Gov. Ron DeSantis was originally meant to address skyrocketing property insurance rates, however, the condominium safety bill was added to the agenda at the last minute. Both subjects were addressed in bills passed by the House and the Senate and signed by the governor.
Broadly, this is the outline of the condominium recertification requirements:
- Recertification of condos three stories or taller will be required after 30 years, or 25 years if the building is within 3 miles of the coast, and every 10 years thereafter.
- In addition, the bill requires that condominium associations have sufficient reserves to pay for major repairs and conduct a study of the reserves every decade.
- Also, it will require associations to provide inspection reports to owners, and if structural repairs are needed, work must begin within a year of the report. Most of the provisions in the law will take effect in 2024, giving everyone some time to prepare.
There are estimated to be more than 1.5 million condominium units in Florida operated by nearly 28,000 associations, according to a legislative analysis conducted earlier this year. Of those, more than 912,000 are older than 30 years and are home to more than 2 million residents. With only about 650 certified structural engineers in the state, this will be a problem in getting the recertification program up and running in a timely manner.
As far as the homeowner’s insurance proposals, legislators came up with several short- and long-term fixes for the insurance market. Some of the proposals are:
- Preventing insurers from dropping or refusing to insure homes solely because of a roof’s age if the roof is less than 10 years old.
- For roofs older than 15 years, insurers will have to allow homeowners to have an inspection of the roof’s condition before refusing coverage.
- Legislators also placed numerous limits on the fees lawyers can collect in lawsuits against insurers. Insurers have continually blamed excessive litigation by trial lawyers and claims triggered by fraudulent roofers for driving up the costs.
- Legislators also agreed to assign $2 billion to create a new program for reinsurance – insurance that insurers buy – and require any companies that use it to pass those savings on to homeowners.
- Enhancing scrutiny of insurers that fail.
At this point, no one can predict if rates will go down. My fear is that stricter regulations regarding roofs and scrutiny of companies will not sit well with the insurance companies and give them a reason not to do business in Florida. They will, however, like making it more difficult for lawyers to bring lawsuits. That said, we need to start somewhere, and hopefully Florida insurance companies will decide that our state is a good place to do business with a huge pool of homeowners.
The Florida real estate market has so much going for it, it’s important to everyone to make sure our buildings are safe and our insurance is affordable.
