South Florida Real Estate
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Florida's SIRS Requirement and the Impact on the Condominium Market
The recent rollout of the Structural Integrity Reserve Study related statutes are having an impact on the real estate market in South Florida. Focusing mainly on buildings 30 years and older, the requirement also impacts condo associations founded on or before July 1st 2022 and also associations undergoing the developer turnover process. The challenge for homeowners is in the accuracy of these studies, and avoiding overreach by the HOA - i.e. excessive inclusion of items in the reserves requirements.For example, we recently encountered a SIRS study which mentioned "degradation of building components by salt water" - even though the structure is 15 miles from the shoreline!
Older buildings are facing extremely high special assessments (over $10,000), and newer buildings are facing increases of monthly assessments, of 25% or more. The market reaction is beginning to show in the supply of homes on the market, as well as the market times.
Market Trends for Broward and Miami-Dade Counties
Instead of using a national or even state-wide trends, our team splits out the two main counties in South Florida, and refines it further with separate charts for condos and single family homes.
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HOA and Community Advisor
The core declaration documents are typically set up by the developer and their attorney (who likely uses a template from other clients); this results in a catch-all type document which may have provisions which are not appropriate or adequate for your building.
There is a massive hurdle here: Changes in the declarations typically require 70% or more of the voting membership. Thus it is a worthy goal for an HOA to go to extreme measures to obtain the voting counts in order to change this requirement. A two pronged strategy could be an answer here ..
a) Set up proxy votes for residents unlikely to participate in voting. The form required here includes the subject resident's name and address, and the date/time of the meeting. It is signed by the resident and then by the voter who will act as a proxy for the vote. If set up correctly, the proxy assignment should be effective for 90 days.
b) Set up online voting - via smart phone or computer.
Some popular vendor options
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Allowing elections and other voting to occur online is secure as well as offering savings in printing and mailing costs for the HOA. Setting up the system is easy, and is typically $500-800 per year for most condo associations.
Rolling out e-voting starts with a vote by the board to allow electronic voting, then an official letter to each resident requesting a response; finally, residents are added to the systems database and instructions are sent via email **.
Check with your attorney for a complete list of steps, and the timing required here, as this involves interpreting the Florida Statutes. And extra bonus offered by integrating with an e-voting provider: residents can opt-in for electronic letters and notices.
One association we worked with had over $12,000 in annual printing and mailing expenses in 2024 - a cost which could be pruned in this new era of rising HOA fees.
Once proxy voting is widespread, along with established e-voting, changing the barriers embedded in your HOA's Bylaws should be feasible.
** Ensuring that HOA management has email addresses for its residents can be a challenge: at the moment, Florida requires only the owner name (or company name), mailing address, and unit number. Believe it or not: telephone # is optional! Clearly more attention is needed by Florida lawmakers here.