The Florida Condo Due Diligence Guide

The rules changed, and mostly in your favor

After the 2021 collapse of Champlain Towers South in Surfside, Florida overhauled the rules for older condominium buildings. Taller, aging buildings must now complete a structural milestone inspection and a reserve study, and associations generally can no longer waive reserves for the building's major structural parts.

For a buyer this is mostly good news. The health of a building is more transparent than it has ever been. But that transparency only helps you if you actually read the documents before you commit, which is what this guide is for.

The milestone inspection

A milestone inspection is a structural inspection performed by a licensed engineer or architect, required for condominium and cooperative buildings three stories or taller. Phase one is a visual assessment of the building's major structural components. If it finds signs of substantial structural deterioration, phase two is a more detailed investigation.

The age at which the first inspection comes due is set by statute and has been amended more than once, so do not rely on a rule of thumb. The practical move is to ask, for the specific building, whether a milestone inspection has been completed, and then to read the report.

A completed report with no major findings is a green light. A report that flags deterioration is not an automatic dealbreaker, but it tells you repairs, and the money to pay for them, are coming.

The Structural Integrity Reserve Study

The SIRS is the money side of the same idea, and it is required for the same buildings, three stories or taller. A qualified inspector reviews the major structural components, things like the roof, load-bearing walls, foundation, floor, fireproofing, plumbing, electrical, waterproofing, and windows, and calculates the reserves the association must hold to maintain and eventually replace them.

The key change is that associations generally can no longer vote to waive or shortcut reserves for those specific components. That reform is exactly why some older buildings have raised monthly fees or levied one-time special assessments in recent years: they are catching up on reserves that were underfunded for a long time. It stings in the short term, and it makes the building far more predictable to own afterward.

Reading a fee increase correctly

A building that just raised its fees or passed an assessment can look like the risky choice next to one that has not. Frequently it is the opposite. The building that has done its study, faced the number, and started funding is ahead of the building that has not yet been forced to.

What you are trying to distinguish is a building catching up honestly from a building still deferring. The documents tell you which, and the sequence matters: has the study been done, what did it say the reserves should be, and is the current budget actually funding that.

The documents to pull, every time

Order these early, because the review window is short and some of them take time to arrive. Reading them is the entire job.

• The milestone inspection report, if the building is due for one, including any phase two findings.
• The Structural Integrity Reserve Study.
• The current and prior year budgets, plus actual reserve balances, not just the target.
• The last twelve months of board meeting minutes. This is where trouble is discussed before it reaches a formal notice.
• Any pending or approved special assessments, including ones discussed but not yet voted.
• The master insurance policy, and what it covers versus what your own unit policy must.
• The association's governing documents: rental restrictions, pet rules, occupancy, and approval process.
• The estoppel certificate, ordered early, and compare it against what the listing claims the fees include.

The monthly number is not the fee

When you shop condos, compare the total monthly picture rather than the advertised association fee. Two units at the same price can carry very different real costs once the pieces are added up.

The association fee, your own unit insurance, the reserve trajectory implied by the SIRS, and any assessment already scheduled all belong in the same column. A lower fee in a building with an underfunded study is not a lower cost, it is a deferred one.

Questions worth asking the board or manager

• Has the milestone inspection been completed, and may I read the report and any phase two findings?
• Has the SIRS been completed, and is the current budget funding the reserves it calls for?
• What assessments have been levied in the last five years, and what is under discussion now?
• What major projects are scheduled in the next three to five years, and how will they be funded?
• What are the rental restrictions, and have they changed recently? This matters enormously if income is part of your plan.
• What is the owner-occupancy ratio, and does the building meet the requirements of the loan type you intend to use?

The order of operations

1. 1Confirm the building type and heightThe milestone and SIRS requirements apply to condominium and cooperative buildings three stories or taller. Establish first whether the building is in scope.
2. 2Ask for the milestone report before you writeNot during the inspection period if you can help it. Knowing early changes what you offer.
3. 3Read the SIRS against the budgetThe study says what reserves should be. The budget says what is being funded. The gap between them is your future assessment.
4. 4Read twelve months of minutesBoards discuss problems long before they notice them formally. This is the cheapest diligence available and almost nobody does it.
5. 5Price the real monthly costFee, unit insurance, and any scheduled assessment, together, then compare buildings on that number.
6. 6Check the rules against your actual planRental restrictions, pet rules, and occupancy limits, verified in the current documents rather than the listing remarks.
7. 7Confirm financing fits the buildingOwner-occupancy ratios, litigation, and reserve funding can affect which loan types a building qualifies for. Find out before you are under contract.