Surfside Condominium Disaster

The events of June 24th involving the collapse of a high-rise condominium in Surfside was a shocking and terrible tragedy causing an immeasurable loss of life. A slew of legal and property management related issues were born from this horrific event. The unexpected building collapse will likely cause a monumental shift in the decision-making process and required procedures for high rises in south Florida if not the entire state of Florida. Here in Palm Beach County, the Board of County Commissioners has ordered a task force be formed to study the issue for the purpose of instituting its own recertification process for high rise condominium buildings. The recertification process, which currently only exists in Broward County and Miami-Dade county, mandates condominiums be certified every forty (40) years that all structures are sound and fit for occupancy by its residents. The Palm Beach County task force is gathering building permits from the last fifty (50) years on every condominium building which is three stories or higher. Although much of the attention is likely to focus on high rise condominiums, especially those on the beaches, other structures are not immune from scrutiny. Just recently the Miami-Dade County Courthouse was indefinitely shutdown with all personnel relocated due to structural issues with that complex. The median age of a beachfront high-rise building of ten (10) stories or more in Palm Beach County is forty (40) years. That is the same age as the Surfside condominium that collapsed on June 24th. There are eighty-six (86) aging ocean side high-rises in Palm Beach County. Given the gravity of events on June 24th it is very likely Palm Beach County will be adopting a recertification process which exists in Broward County and Miami-Dade, however on a more tighter time frame. Certain Palm Beach County Commissioners have suggested a recertification of the structure every five (5) years. For property managers and members of Boards of Directors, you will be tasked with coordinating efforts with the necessary structural engineer to inspect the structure and have reports disseminated. However, engineering reports are not always clearly written. Vague conclusions in a report can lead to a lack of guidance and unclear directives. Thus, follow up questions and inquiries may need to be made to the hired engineer. These communications should always be in writing so there is a paper trail evidencing your diligence. These events will also put more intense scrutiny on the financial health of the condominium association. It has been reported that only approximately 30% of condominium associations in south Florida have fully funded reserve accounts. We all know why, the intense pressure to not fully budget for reserves in an effort to keep assessments low. However, the lack of adequate reserves can result in a reluctance to address required capital improvement projects and desperately needed repairs, risking the health and safety of the residents. And the necessary funding for these projects could result in a shocking large special assessment on the membership. Also, it is recommended that a “Reserve Study Report” be acquired every 3-5 years identifying all aspects of the Association that involve replacement cost in excess of $10,000, referencing the life span of those items, the projected cost of repair or replacement, in conjunction with an analysis as to reserve sums needed to address these issues. A few years back reserve studies were mandated by Florida law, however, pressure to eliminate this requirement resulted in Tallahassee striking this obligation from Florida’s Condominium Act. Look for the reserve study report requirement to once again become law as the state legislature reacts to the events in Surfside in an effort to make all those residing in a condominium secure in their belief that they are living a structure which is sound.