THE FLORIDA LEGISLATURE BETTER KILL HB 913 AND SB 1742

In 2021, The Champlain Towers collapsed in Surfside, killing 98 innocent men, women and children.  After that collapse The Florida Legislature did the right thing and for the first time, mandated that Florida condominium owners contribute toward funding a reserve account each year.  The vote was 110-0.

After the vote passed, one legislator announced that Florida never needs to worry about another collapse like Surfside ever again.  What a joke.  In only three years The Florida Legislature again turned soft and produced bills that yet again put Floridians in harm’s way.  That 110-0 vote meant nothing.

HB913

House Bill 913 will allow funding reserves by using lines of credit.  This is like paying your monthly condominium assessments by using a credit card.  Guess what?  Those lines of credit are not free.  The banks require the repayment withinterest.  When a condominium takes out a line of credit, the banks will require the association to put the re-payment of the bank loan with interest in the association’s monthly budget or pass a special assessment promising to re-pay the line of credit. The money in reserves will eventually be used to pay for repairs, but the bank loan repayment still needs to be repaid each month.  Now, when there’s no money in reserves, the association will need yet another loan to now replace the funds it just used. And again, that loan will be with interest.  It will be a never-ending process.  A never ending loan that all of the owners will have to re-pay with interest.  It’s like using your credit card to pay for reserve payments and when you pay off some of your balance you will need to use it again, and again and again. Eventually, the monthly payments will far exceed what the payments would have been if everyone was simply required to pay what the reserves required in the first place.   This is playing with fire and condominium owners will forever be in debt. Count on it.

SB 1742

Senate Bill 1742 also lets condominium owners fund reserves with lines of credit, but this bill is even worse.  It should be killed for the reasons listed above.  Moreover, this bill would allow reserve funds to be invested in anything a financial advisor gives the thumbs up to.  Of course financial advisors can never be wrong.  Anybody know any financial advisors that made their clients money in the past two months?  Has not everybody lost a tremendous amount of money in the past two months in their retirement accounts?  How can this possibly be allowed for reserve funds? Why not simply require that the funds be placed in FDIC insured accounts and leave it at that?  The full amount of the funds must be available when needed to repair the building and availability cannot depend on the ups and downs of the stock market or the price of gold and silver.   Then, the bill goes on to require an “investment committee” consisting of at least two members at the condominium.  It’s almost impossible to get members to run for the board.  Now two more members would be required. Ridiculous.  

In addition however, this bill allows condominium owners to pause reserve contributions for up to two years until December 31st, 2029! In those 2 years, no doubt that the condition of the building will become exponentially worse, requiring even larger reserve fund contributions when they start up again. It’s like deferring payment on a loan. This is truly unbelievable.  Remember that 110-0 vote mandating reserve payments.  Well, that apparently meant nothing.  What a slap in the face to the victims and their families.  I have always said that we can debate all day long about why The Champlain Towers collapsed.  Was it the parking garage, the pool deck, the building next door?

THE REASON THE CHAMPLAIN TOWERS COLLAPSED IS BECAUSE THERE WAS NOT ENOUGH MONEY IN RESERVES IN 2018 AND 2021.  HAD THERE BEEN ENOUGH MONEY IN RESERVES THE BUILDING WOULD HAVE BEEN REPAIRED AND THE 98 PEOPLE WOULD BE ALIVE TODAY.  BUT RESERVE CONTRIBUTIONS WERE NOT MANDATORY AT THE TIME.  THERE WAS NO LAW REQUIRING IT.

The Florida Senate couldn’t even honor their commitment to the health, welfare and safety of condominium owners for three years.  Again, they would allow condominium owners to kick the can down the road for reserve payments another two years.  And guess what’s going to happen in two years?  They will do it again.  Just like what happened with fire safety in high rise condominiums year after year after year.

The Florida Legislature is again putting money before safety. Even though nearly every senior citizen has a paid-off condominium that can easily obtain a mortgage or reverse mortgage to pay the reserve assessment every month, The Florida Legislature couldn’t care less.  Even though owners have waived reserves year after year or decade after decade, The Florida Senate would reward them and allow them to do it again.  It’s remarkable actually.  It’s almost ironic when you think about the fact that if there was a problem in a building and the owners needed to escape, I’m guessing it’s the senior citizens who get out of the building last or not at all.   The Florida Senate bill is not helping them.  It’s jeopardizing their safety.

So, with all due respect legislators, remember how proud you were to originally pass bills mandating reserve contributions?  It was a great day for Florida, long overdue and a tribute to The Champlain Towers victims and their families.  Floridians need you to do it again.  Don’t buckle.