Florida’s New Milestone Inspection Requirements: What Real Estate Agents Need to Know.
Florida's real estate market is as dynamic as it is desirable, but a new piece of legislation is reshaping the landscape, particularly for buildings of a certain age and size. Florida’s milestone inspection requirements are a direct response to ensuring public safety and building structural soundness. For real estate agents, understanding this mandate is crucial, as it significantly influences property transactions, client decision-making, and even property values. Here’s an overview of what you need to know about these requirements and their impact on the real estate industry.
The Legislative Background
In response to the tragic Surfside condominium collapse in 2021, Florida lawmakers introduced Senate Bill 4-D in 2022, which amended the Florida Condominium Act to address structural and financial challenges facing condo communities. A follow-up bill, SB 154, was passed in June 2023 to clarify and refine SB 4-D’s provisions. These legislative changes bring significant new obligations for condo associations and unit owners, creating challenges and opportunities for real estate professionals.
What Is a Milestone Inspection?
A milestone inspection is a mandatory evaluation of a building’s structural integrity. These inspections, conducted by a licensed engineer or architect, aim to ensure that residential and mixed-use buildings remain safe and compliant with updated structural standards.
Key Features:
Timing: Initial inspections must occur by December 31 of a building’s 30th year. For buildings receiving their certificate of occupancy before July 1, 1992, the initial inspection deadline is December 31, 2025 (per SB 154).
Frequency: Inspections must be repeated every 10 years thereafter.
Process:
Phase 1 involves a visual assessment to identify visible structural concerns.
Phase 2 is required if Phase 1 reveals potential issues, including detailed evaluations and material testing to determine repair needs.
Reporting: Condo associations must retain inspection reports for 15 years and make them available to tenants and prospective buyers upon request.
Reserve Requirements
Another major change to Florida condo law addresses reserve fund management:
Mandatory Reserves: As of December 31, 2024, condo associations can no longer waive reserve contributions. Budgets adopted on or after January 1, 2025, must allocate funds based on a Structural Integrity Reserve Study (SIRS).
SIRS Requirements: Conducted every 10 years by an engineer or architect, this study evaluates common areas, reserve funds, and necessary contributions to meet future repair costs.
Impact on Owners: Associations may need to raise fees or issue special assessments to meet reserve requirements, affecting unit owners’ financial obligations.
Which Buildings Are Affected?
Real estate agents must understand which properties are subject to milestone inspections to guide clients effectively:
Age Requirement: Buildings 30 years or older, or 25 years if within three miles of the coastline.
Size Requirement: Multi-family residential buildings of three stories or more.
Key Points of the Inspection Process
Phase 1: A licensed professional conducts a visual evaluation to identify any apparent structural issues. If no concerns are found, further action may not be needed.
Phase 2: Triggered if Phase 1 reveals structural concerns, this phase includes intrusive methods like material sampling to assess the extent of damage and necessary repairs.
Responsibilities:
Building owners or associations must ensure inspections are completed within the specified timelines.
Failure to comply can result in penalties, delayed transactions, or even building condemnation.
How This Affects Real Estate Transactions
Milestone inspections introduce complexities for buyers, sellers, and real estate agents. Here’s how:
Buyer Concerns:
Buyers may hesitate to invest in properties without completed milestone inspections or those that have failed inspections.
Prospective buyers will demand transparency about structural integrity and compliance with regulations.
Seller Obligations:
Sellers must complete required inspections and address any identified defects before listing properties.
Structural concerns must be disclosed to potential buyers, as withholding information can result in legal consequences and delays.
Agent Responsibilities:
Agents must be well-versed in Senate Bill 4-D and 154, and the milestone inspection process to guide clients effectively.
This includes negotiating terms related to inspections, timelines, and repairs to ensure smooth transactions.
Transaction Timelines:
Pending inspections or unresolved structural issues can delay transactions.
Agents should anticipate potential setbacks and structure contracts to accommodate inspection and repair timelines.
Impact on Property Values and Insurance
Property Values:
Non-Compliance: Buildings requiring extensive repairs or failing to meet inspection standards may experience devaluation and may not be able to get conventional financing.
Compliance: Properties with favorable inspection reports may see increased buyer interest and reinforced value.
Insurance Premiums:
Non-compliant buildings may face higher premiums or difficulty obtaining coverage.
Compliant properties may qualify for discounts and attract buyers seeking lower insurance costs.
What Real Estate Agents Need to Communicate to Clients
For Sellers:
Have a complete understanding the buildings milestone status and financial reserves before listing a property.
Disclose known structural issues or pending repairs, and special assessments to potential buyers.
Understand that addressing defects can preserve or enhance property value.
For Buyers:
Verify whether milestone inspections have been completed and review reports.
Assess potential costs for repairs or future inspections when evaluating properties.
Negotiate terms related to inspection findings, including shared repair costs or price adjustments.
General Advice:
Work with building management and condo associations to obtain inspection schedules and results.
Collaborate with attorneys to ensure contracts address inspection compliance and repair agreements.
Conclusion
Florida’s milestone inspection requirements underscore the importance of structural safety and compliance in the real estate market. For real estate agents, staying informed about these changes is not just important—it’s essential. Your expertise in navigating these regulations will directly impact your clients’ buying and selling experiences, positioning you as a trusted advisor in a rapidly evolving market.
By staying ahead of the curve, partnering with experts, and communicating effectively, agents can mitigate transaction risks and provide top-tier service to their clients.
If you would like to learn more about Senate Bill 4-D, Bill 157, and the milestone inspection process, contact our team at SkyDome Construction for expert guidance and assistance with milestone inspection repair work.
About the Author
David Litvinov, is the President of SkyDome Construction, a leading Milestone Inspections Repairs Construction Company based in Sarasota, Florida. He brings over 15 years of experience as a developer and general contractor with a proven track record in the construction industry. He holds a BS from the University of Illinois, an MBA from the University of Southern California and a Certificate in Construction Project Management from Columbia University.
Contact me for more information: David@GoSkyDome.com
