This blog has previously discussed Florida’s legislation that requires regular building inspections for condominium projects of three stores and higher and requires homeowners’ associations to maintain reserves. The act was unanimously passed by both houses, and Governor DeSantis signed the bill into law on June 9, 2023.

Under the new law, inspections are required when a condominium building reaches 30 years of age and every ten years thereafter. For buildings within three miles of the coast, the first inspection is required at 25 years of age.

In addition, mandatory structural integrity reserve studies are required every ten years under the new law, and reserves are required to be maintained based on the studies. The reserves must be fully funded. The power of the HOA to waive reserves will be removed, effective December 31, 2024.

New Jersey has passed similar legislation. These laws apparently attempt to exchange some short-term pain in maintaining reserves for long-term stability.

These laws will require higher assessments in most cases, and that will likely mean lower prices for sellers. Buyers will have to become more discerning as to the long-term financial implications. I’ve also seen the argument made that with the great number of condominium projects in Florida, there may be too few professionals available to accomplish the inspections and repair estimates.

The main downside of such legislation is that it will make condominium living more expensive and may price some retirees and lower-income individuals out of the market entirely. Insurance costs are also increasing.

But, logically, the cost of maintenance should be factored into every residential property purchase. The ability of an owners’ association to waive reserves and thereby kick the maintenance can down the road is a dangerous proposition.

Perhaps older condominium projects will be terminated, and developers will seek to take advantage of financial distress by seeking to develop new condominium projects. New construction will certainly be favored under the new laws.

Should we pass similar legislation in South Carolina? Let me know what you think.