Legal News You Can Use: 2025 - 2026 Community Association Legislative Update

2025-2026 COMMUNITY ASSOCIATION LEGISLATIVE UPDATE

Insurance Coverage (Section 718.111 of the Florida Statutes)

Mixed-Use Buildings (Section 718.407 of the Florida Statutes) Last year, the Condominium Act was amended to allow a condominium to be created within a portion of a building that is otherwise not a condominium. Many of these mixed-use buildings (many of which become “condominium hotels”) feature shared facilities, which are typically maintained by the owner of the non-condominium portion of the building (commonly referred to as the “Shared Facilities Owner”). The Shared Facilities Owner is generally responsible for managing the building’s shared facilities and collecting funds from the condominium association for their upkeep. This year, the Legislature clarified and revised the statutes governing these types of buildings as follows: » Within 60 days after the end of each fiscal year, the Shared Facilities Owner must provide the association with a complete financial report of all costs for maintaining and operating the shared facilities. The report must include copies of all receipts and invoices. » Within 60 days after receiving the complete financial report, the association may challenge any apportionment of costs for the maintenance and operation of the shared facilities. » If the Shared Facilities Owner fails to provide the report and copies of the receipts and invoices to the association within the 60-day period, the Division of Condominiums may impose penalties and otherwise enforce and ensure compliance. In addition, this year’s legislative changes clarify that last year’s amendment expressly permitting these types of “mixed-use” buildings does not apply retroactively and that it only applies to condominiums whose declarations were initially recorded on or after October 1, 2024. This represents a departure from last year’s version of the law, which stated that the law applied retroactively to existing condominiums. Notably, the prior version also included language stating that the statutory authorization would “not revive or reinstate any right or interest that has been fully and finally adjudicated as invalid before October 1, 2024.” That provision has since been removed, and the implications of its removal on previously adjudicated rights remain unclear. ■

The Condominium Act includes provisions that govern the type and amount of insurance an association is required to maintain for the property. However, these statutes have historically been drafted in a confusing manner, leading to ongoing debate over their intended scope and requirements. In an effort to clarify these issues, the legislature enacted revisions this year – but rather than providing clarity, the amendments may have further muddled the requirements, creating greater confusion and complexity. Notably, the revised statutes now provide that: » Every condominium association must have adequate property insurance, regardless of any requirement in the declaration of condominium for certain coverage by the association. » The amount of adequate insurance coverage for full insurable value, replacement cost, or similar coverage may be based on the replacement cost of the property to be insured, as determined by an independent insurance appraisal or an update of a previous appraisal. ▪ Note – Previous law used the word “must” instead of “may.” The use of the word “may” arguably suggests that an association has discretion to adopt a different method for determining what constitutes “adequate insurance coverage.” » The replacement cost must be determined at least once every 3 years, at minimum. » When determining the adequate amount of property insurance coverage, the association may consider deductibles. ▪ Note – This language appears to suggest that an association has the discretion to “determine” the amount of property insurance coverage based on different options for deductible amounts. ■

16 | Kopelowitz Ostrow Ferguson Weiselberg Gilbert