Florida Condo Milestone Inspections and Reserve Studies for Buyers

What changed after Surfside, in plain terms

The 2021 collapse of Champlain Towers South in Surfside led to Florida's 2022 condo safety law, SB 4-D, with amendments in the years since. For buyers, the law does three things:

• Requires engineers to look at the structure on a fixed schedule through the milestone inspection.
• Requires a reserve study for structural items, the SIRS, so the association knows what major components will cost to repair or replace.
• Requires the association to actually fund those reserves. For budgets adopted on or after December 31, 2024, owners can no longer waive or reduce SIRS reserves.

The result is safer buildings and more honest budgets, with a cost: monthly fees and special assessments rose in many older buildings as associations caught up on deferred work and empty reserve accounts.

The milestone inspection: schedule and phases

The milestone inspection applies to condo and co-op buildings with three or more habitable stories.

• First inspection. Due by December 31 of the year the building reaches 30 years from its certificate of occupancy, or 25 years if the local building official requires it based on local conditions. Buildings that reached 30 before July 1, 2022 were due by December 31, 2024. Those that reached 30 between July 1, 2022 and December 31, 2024 were due by December 31, 2025.
• After that. Every 10 years.
• Phase 1. A licensed architect or engineer does a visual examination of the structure. If there are no signs of substantial structural deterioration, the inspection ends there.
• Phase 2. If Phase 1 finds substantial deterioration, a more detailed inspection follows, which may include testing, and it leads to a repair plan.

As a buyer, the phrase you look for is whether a Phase 2 was required and whether the recommended repairs are finished, scheduled or still unfunded.

The SIRS: what it covers and how to read it

The Structural Integrity Reserve Study is a reserve study limited to the parts of a building that keep it standing and dry. It covers the roof, the load-bearing structure, fireproofing and fire protection, plumbing, electrical systems, waterproofing and exterior painting, windows and exterior doors, and other major items whose failure would harm those components.

For each item, the study estimates remaining useful life and replacement cost, then recommends an annual reserve contribution. When you read one, compare three numbers:

• The recommended annual funding in the study.
• What the current budget actually collects for those same items.
• The reserve balance today against the cost of items due in the next few years.

A building whose budget matches the study and whose near-term items are covered is in good shape. A big gap between the study and the budget usually points to higher fees ahead, a special assessment or a loan. The SIRS must be redone every 10 years.

Where these reports appear in your purchase

Florida resale condo buyers receive the association documents during the contract, and they can cancel within 7 days, excluding weekends and legal holidays, after receiving them. In recent years the list of required documents has grown to include items such as the milestone inspection summary and SIRS information when they apply, along with the budget, rules and governing documents.

My order of reading:

• Milestone summary. Phase 1 only, or Phase 2. Any shoring, restricted balconies or safety orders.
• SIRS. Funding gap and near-term items.
• Budget. Whether reserves match the study.
• Board minutes. Repair contracts, loans, insurance renewals and assessment discussions.

If documents are missing, ask for them in writing. A building that should have a milestone inspection or SIRS on file and cannot produce one is a building to be careful with. This isn't legal advice, and an attorney can review the documents if the stakes are high.

Questions to send the association manager in writing

Documents tell you what happened. The manager can tell you what is planned. I send these questions by email so the answers are on record:

• When was the milestone inspection completed, and was a Phase 2 required.
• Which repairs from the inspection are finished, which are under contract, and what remains unfunded.
• When was the SIRS completed, and does the current budget fund it in full.
• Is any special assessment, loan or line of credit being discussed or planned for the next two years.
• When does the master insurance policy renew, and what was the last premium change.
• Is the association involved in any litigation, including construction defect claims.

Answers that are prompt and specific are a good sign about how the building is run. Slow or evasive answers deserve weight in your decision, especially inside the 7-day window.

How the rules affect financing and resale

Lenders review condo buildings before approving a loan, and the major mortgage programs look closely at reserves, structural repairs and inspection findings. A building with unresolved critical repairs or significant underfunding can end up non-warrantable, which removes most conventional financing for its units.

That matters even if you pay cash. When you sell, your buyer pool shrinks to cash buyers and specialty lenders if the building cannot pass lender review, and that tends to push prices down. A building that has completed its inspection, finished repairs and funded its reserves is often easier to resell, even at a higher monthly fee.

Choosing among buildings with this in mind

Florida's typical single-family value is $396,809 against $262,592 for condos, and in some cities the gap is wider. Typical condo values are $170,712 in Orlando, $194,297 in Tampa and $199,382 in St. Petersburg, against $383,531 in Miami and $403,495 in Fort Lauderdale. Low condo prices in a city often reflect a large stock of older buildings, and some of them carry the costs described above.

Practical rules I give buyers:

• Two-story garden buildings fall below the three-story threshold for these laws. They can still need roofs and pipes.
• Buildings near 30 years old deserve the closest look, because their first milestone cycle may still be under way.
• Buildings that have finished repairs often carry a higher fee and a lower risk, and the higher fee is the more predictable number.
• New construction faces no milestone inspection for decades. Buyers from a developer get 15 days to cancel and deposits up to 10 percent go into escrow.

I can build a shortlist of buildings that have completed their milestone cycle and funded their reserves, which is the most direct way to avoid buying into a repair project.