Months after the devastating Surfside condo collapsed, questions about Florida's aging high rises remain.

From condo owner rights to building safety, learn the steps you should take that could help protect you and your investment.

That and more, stay with us, as we dive into "Your South Florida."

Hi, I'm Pam Giganti.

Welcome to "Your South Florida."

More than two months have passed since the tragic collapse of the 13-story Champlain Towers South in Surfside, taking 98 innocent lives.

As the community continues to heal and to come to terms with this immense loss and what caused the collapse, condo owners and potential buyers are questioning the safety of South Florida's aging buildings.

As part of our recent virtual town hall, I was joined by a panel of experts to address your condo concerns, and to learn the questions you should be asking to keep you and your investment safe.

So let's go ahead and start by looking at building safety.

We've heard a lot about building recertification lately.

Broward and Miami-Dade are currently the only two counties in the state with building safety inspection programs, requiring 40-year recertifications.

Palm Beach County is now proposing 25-year inspections for buildings east of I-95.

So Tom, I wanna start with you.

As a Structural Engineer, I wanna talk about recertification.

But before we do that, tell us a little bit more about what a structural engineer is and how that might differ from, say a civil engineer.

In the State of Florida, we all get registered when we do work on buildings as professional engineers.

So when that happens, we all take an exam.

It's an eight-hour exam and you take it in the discipline of your choice.

Civil Engineering is an extremely broad discipline.

It covers everything from, you know, roads, transportation, traffic lights, water, wastewater, geo-technical, you know, surveying there's a lot.

And structural is one of those many things.

So, when you go and take your exam there, you take an exam that's got a broad section in the first part of the day, and then a, a very detailed part in the second part of the day.

And so what a Structural Engineer is responsible for is making sure that every building that you walk into, every bridge that you drive over, is going to be safe for the occupants that are in there.

You never, ever, want to have a morning like they did in Surfside.

Every, you think about, you're going to all the buildings that you go into on a regular basis.

You never think about something like that happening because you trust that the design community is there and putting the designs together for you.

Right, so let's talk a little bit then about recertification.

So what is it that engineers are looking for when they go into a building?

And we're talking about buildings that have been around for 40 years.

We talk about this 40-year recertification process that we know is happening here in south Florida.

So what specifically are they looking for in order to have a building pass or fail?

There's two different types of inspections are required.

One is electrical.

And I'm not really all that qualified to talk about it, but they look at everything from, you know, panel boards and the meter rooms and all the other things that are in there.

You know, egress lighting, you know, illumination outside, things like that to make sure all of that is functioning properly.

To make sure everything's grounded correctly.

On the structural side, we look at the building from top, from top to bottom.

So if you start with the roof, you wanna make sure that the roof isn't leaking.

You look around the perimeter of the building, we wanna look at balconies.

That's a big deal on a lot of these condo buildings.

And the railings, so we wanna look to see if there's, it's exhibiting any damage.

Can we see reinforcing steel that we're not supposed to see.

Is concrete falling, you know?

As in concrete's falling or chunks of concrete that have fallen to the ground.

Then we'd like to go into the, I'll call 'em unconditioned spaces.

Where you might have an underground parking garage.

An area where that might be a pool.

And a lot of the big, you know, mechanical and electrical equipment rooms and stuff like that.

Those are typically not conditioned.

So, while they're not specifically outside, they still get the same, you know, concentration of salt air on them as the outside of the building does.

And we look for signs of damage.

We'll look at the foundation.

Is there any signs of settlement.

We're looking for cracks in concrete, we're looking for water leaking through concrete.

We're looking for rusting and steel connectors.

In wood buildings, we're looking for rotted wood.

A whole host of different things that would trigger, you know, us to recommend repairs or other things like that for the building.

Now Dawn, I wanna bring you into this conversation.

And before we talk about a condo owner's rights related to recertification, tell us a little bit about your organization, CAI, and what you all do.

Community Associations Institute is a nonprofit membership-based organization.

We're an international organization with 43,000 members.

We have 60 chapters around the world, including eight chapters in Florida.

Our organization is dedicated to building better communities through setting standards, best practices, educating board members of condominiums, homeowner's associations and housing co-ops, as well as the management profession.

And we are unique in that, we bring everybody under one umbrella.

CAI, Community Associations Institute has the residents who are members of our organizations and our organization.

And we have lots of resources for them.

Board members of condos and association, management.

And then the professionals that serve these associations, including attorneys, accountants, reserve study providers, engineers, landscapers, pool supply companies, et cetera.

So our organization also advocates for public policy for community associations, which of course, is something that we're working on right now as a response to the tragedy in Surfside.

So talk about what the next step for a condo owners would be, if they're building fails a recert, a recertification, if they feel, perhaps that the board just isn't listening to them or they're ignoring their safety issues.

What kind of recourse would a condo owner have?

So I think that's a couple of questions.

I think there's a technical response to what the association does if they fail their recertification, which is, I believe they have, the association has something like 120 days to correct the issues related to their failed recertification.

And then as you saw, following the Surfside tragedy, if those remedies are not taken or that those corrective actions are not taken and met with a clean recertification process, then the building will be evacuated.

What the owners have the, the homeowners in that condominium building, they have a tremendous amount of rights, and responsibility, to be informed to access information about, not just the recertification process, but maintenance issues, reserves, how much, what is going, what's going on with the building, period.

Condominium associations in Florida are required to hold open meetings.

They're required to hold open meetings on a regular basis.

They're required to provide information about maintenance, reserves studies, the recertification process to residents on a regular basis.

Through their board meetings, maybe through their web portal, et cetera.

I think there oftentimes what we see is residents are not informed because they haven't had a need to be informed.

Because maybe they're very happy living in their condominium.

They don't need to hear what's going on from the board.

They're everything seems to be working fine and they're happy.

But, often they become engaged a resident becomes engaged after some of these issues have been going on for a number of years.

So number one, become engaged right now.

Go to your condo board's website, go to your condominium website, go to the meetings, go to the annual meetings.

During the annual meetings, there is a requirement in Florida, the legal requirement that the condo board must share the budget, with the proposed budget with the owners.

And in that budget process, disclose whether there is a reserve study, and whether there is reserved funding to meet the needs of the replacement and repairs that needs to be done in the long term.

All of that is a requirement.

Further, there's a disclosure requirement in the resale process.

So when you're buying a home or a condominium unit, materials will be in those, that resale disclosure packet or that estoppel packet, that provides information about the funding for reserves.

You may have to dig for it, but that information must be there.

And it's important information.

And we're actually looking to advocate for an even stronger disclosure requirement in the State of Florida and throughout the country.

Ken, I want you to jump in on this as well.

Talk a little bit about these, this current disclosure requirements.

Revealing the condition of a unit to a prospective buyer.

We talked about this before.

So what does a broker have to reveal?

Is it really just the condition of the unit?

And how does that relate to the condition of the building as a whole?

This may not have been something that prospective buyers were even thinking about.

They were just interested in the unit itself, right?

So talk about that and how maybe the law could change related to this.

So, disclosure is based around, in the State of Florida, caveat emptor rules, which is, "Buyer beware."

So that's a bit of a tough process, so.

Brokers are mandated by law to disclose anything that's related to health and safety in caveat emptor states.

Caveat emptor, again, protects the seller quite a bit in terms of disclosure and puts the burden of discovery to a great extent on to the buyers.

However, health and safety will have to come first.

If brokers are aware of this, if owners are aware of any health and safety issues that might've arisen, through maybe association meetings or inspections that folks become aware of, then anything that would involve health and safety has to be closed and pierces the shield of caveat emptor.

So it's one of the things though that tends to get worked out in, in an open market, in a competitive market because of this concept of uncertainty.

If an individual is uncertain, and given that we're risk averse and research shows again and again and again, if you are uncertain about the cost of something, you will overestimate on average, that cost.

So it's in the best interest of the owners of units, the associations themselves, to become more transparent especially after this tragedy.

What I'd like to say about disclosure.

And related to the building structured disclosure.

Oftentimes when someone buys a home, there's an appraisal requirement of the, of that unit.

And of course, as Ken mentioned, it's really important and buyers happen to look at the, how that unit looks.

When someone's buying into a condominium, especially now, walk around that building.

You don't even have to rely on the reports.

Walk around that building.

Take a look at the garage.

Take a look at the structure.

Take a look at the elevators.

You can walk around and see if there are issues of concern.

Ask questions.

And if the seller or the real estate agent doesn't know the answer to those questions, obviously at this point, in the stage of the game, ask somebody else.

Bring in someone else to answer some of those questions for you.

I think it is important to ask those questions.

Ken, what are your recommendations then for those looking to buy a condo now?

I mean we just heard from Dawn that we should, go walking around.

We need to talk to maybe other unit owners.

Ask a lot of questions.

So should we, if I'm a perspective buyer, should I get my own independent assessment?

Or should I just rely on the information that I'm getting from the building itself and from the board?

You're really looking at two issues here.

The unit itself, the condition of the unit itself, and the condition of the building.

So, due diligence is part of the process.

I think we're going to evolve to a process though where the associations will become very proactive because it's in the best interest of the owners within the building, to have regular inspections and provide those to prospective buyers in the, in the form of wanting to be transparent.

To do this on each individual case would be problematic because to certify or inspect the entire building could be very costly.

So, and these things can be negotiated for during the transaction, where the buyer might pay for the cost or the seller might pay for the cost, depending on what they're willing to do and the given markets that you're in.

But I, that the building inspection is going to be so expensive.

I think we'll find associations fronting that expense, perhaps by annual inspections or something where they can be transparent about the building itself.

And then the unit inspections we'll go back to just like most transactions are here, where you've got due diligence.

You've got a timeframe to go in and do the due diligence.

You could have your inspectors in, and there they're determining the quality of electricity, the plumbing, other items within the unit.

So I think the big ticket item and the big question is not the unit, but the building itself.

And I do think the associations in the best interest will step, of all, will step up and front those thoughts because it's best for all the tenants.

Excuse me, or owners in the building.

And Tom, are you, is your industry already seeing more demand from buildings and from owners for inspections?

We, certainly are.

It's been a very taxing time for engineers in south Florida, in addition to a pretty strong workload, which as the economy has rebounded from the initial bouts with COVID, there's been all kinds of inspection requirements being asked, of the local counties, especially in Broward and Miami-Dade.

They wanna kinda get ahead of other buildings that might have similar, problems as they had in Surfside.

And they wanna get ahead of that.

But now we're starting to see other building departments do the same thing.

So they're scrambling to get engineers to look at stuff.

And it's really interesting now that this has happened, you know, everybody wants their inspection done in a week or two, and, so it's been, it's been very difficult.

Many engineers are kinda stressed out at the moment.

It's, this is a wave that will get through and it'll end eventually.

But I think it's really good that people are paying attention to it.

We talked about what to do when you go look at a building and should you get it inspected?

You know, you go buy a house, you get a building inspection done for that house and they check everything.

It's, you know, if you spend $1,000 to have an engineer walk around the building with you to tell you things were okay, that's probably money really well spent.

If you're gonna spend a half a million to $1 million on a condo.

Can you talk a little bit more about licensure?

We spoke a little bit about it at the beginning of the program, when you were kind of walking us through what, what Structural Engineers do.

But in the State of Florida, not yet.

And I know this is something that you are proposing and pushing for, that Structural Engineers would need to have some sort of certification through testing, correct?

In order to be able to sign off on building plans, correct?

Can you walk me through that.

Correct.

So right now, as I kinda mentioned earlier, there's three things to becoming a professional engineer.

One is education.

You have to have four years of education in an accredited school.

You wanna get four years of experience.

And then you take two exams.

One right after school, which is your fundamentals exam.

And then you take one about four years later.

And that's your professional engineer's exam.

And you take those in the area of your expertise.

So, but because the branches of civil engineering are so diverse, and the buildings, phase buildings, if you look at what we're building today, it is far more complicated than it was even 20 years ago, codes are, have much, many more requirements than they used to have.

And you have to know them.

What used to be a South Florida building code, which was a five by seven, three-ring binder, you know, of a 200 pages it's now, you know, eight and a half by 11, you know, 2,000 pages long, really thin back and forth.

Education requirements for becoming an engineer have decreased.

And that's, you know, that there's all good reasons for that.

And there's a lot of reliance on computer software.

And so what we're saying in the structural engineering community in Florida Structural Engineers Association is, we think that there's already an exam that's in place by the National Testing Service.

The one that we typically get tested by.

And it's a 16-hour exam instead of an eight-hour exam.

So the first day, you're, you test, you learn about, you test, you're tested on gravity loads.

So that's things to push straight down.

And on the second day, you're tested on lateral loads, which are things like hurricane wind forces, you know, things that move the building laterally.

You get into a lot of depth.

And you get quite a few questions.

There's a lot of, write out the answer to problems so you can see how the engineer is thinking and how they're solving these problems.

You know, I've been on the grading committees in years past.

And it's really interesting, you know, to watch how people think through those things.

So we think as a Structural Engineers association, we really like to see this happen.

We actually had a Bill passed by both the House and the Senate in 2015 only to get rejected by, or vetoed by Governor Scott.

And I was fortunate enough to have an audience with him afterwards.

And he said, the only reason he vetoed it, was he didn't have a good understanding of the grandfathering clause.

And there's a lot of people that aren't clear about it.

So we're not gonna try to change what people are doing today.

We're gonna make for a better for the future.

So anybody who is currently practicing as a structural engineer is gonna have a chance to sign an affidavit, to say that they've been practicing, and they're gonna get in without having to take, take the new tests.

But the new people coming out of school, and anybody else who hasn't been doing that work, will.

And it's a passable test.

I mean, I passed it when I was in my fifties.

So I know if I can do it, anybody out there I'll be able to do it.

But the grandfathering clause is gonna make it for me more tolerable.

And a lot of people don't realize that.

We tried in last year on the to get it passed.

And unfortunately it, it was starting to go through the Senate while we struggled in the house.

We're hoping that, you know, people might say, "Hey, instead of just having a PE, do some of this inspection."

Maybe it should be a professional structural engineer that does it.

Let's talk a little bit about the economy, the marketplace and the sale of condos.

Ken, you were recently quoted as saying, condos have always been volatile and they're the canary in the coal mine for the real estate market.

So explain what you mean by that.

So when I made that comment, I was specifically talking about the South Florida market.

Historically, their surges in development.

It's one of the few areas, where we can have an inventory over supply.

Right now, we tend to have in our overall housing an under supply of inventory.

But historically, what happens, what's gonna happen in a real estate market, happens in its condo market first.

So, you will see pricing, whatever happens in pricing, up or down, that's gonna follow in the right in a traditional, single family residence in the close proximity.

So one of the things I wanted to talk about is this concept though that, we are in south Florida approaching our the peak of our fifth cycle in the last 40, almost 50 plus years in our housing cycle.

And so we're going to see a real estate event.

And I don't like that term, but I don't wanna use the word bubble 'cause I don't think we're in a bubble.

But we're gonna see some rough times in real estate in the near future.

And I don't want people to say, "Well, whatever reaction that happens."

Or think, "Whatever reaction that happens in the condo market, was because of Surfside."

Surfside was a Six Sigma event.

People understand that buildings do not fall down on a regular basis.

I don't think it's gonna work its way into the pricing.

Other than if people just fail to do proper disclosure and then it will create issues.

But I think people will be willing.

Sellers will be willing to disclose.

So, but I just want folks to understand that we are near the peak of the cycle.

Whatever happens in the condo market, it's not gonna be because of Surfside.

It's gonna be just because of what happens in every real estate cycle.

Let's talk about insurance for a moment.

Dawn, I wanna bring you in.

Talk about insurance coverage for condominiums post Surfside.

What are we looking at here?

And I know in Florida, it's a bare wall state.

So can you explain to people what that means exactly?

So in Florida, the coverage for the condominium building itself is a bare walls state.

Which means the coverage is, there's an appraisal that must be done and the coverage must be enough for a full replacement of the bare walls of that building.

So that means everything, everything as developed, except what the interior of that unit.

So, none of the belongings, none of the accessories, none of the appliances, et cetera.

It's just the bare walls.

And, that requirement of that appraisal is actually unique to Florida and not one that exists in most other states to make sure that there's a full replacement value.

And then individuals would carry their own insurance in an HO-6 policy for the, for their particular unit.

As far as what we're going to see happening, I've had a lot of conversations with reinsurers and carriers and, community association, risk management specialists, as well as property casualties, that, National Property Casualty Association.

There's a bit of a wait-and-see right now.

I do think underwriting guidelines will change for condominiums to require some building inspections.

What that's gonna look like, I'm not sure.

We're working on some recommendations for the insurance field, as well as for the legislature to consider for condominiums.

And I would say, I think Florida is also unique, probably because Florida insurance is very difficult anyway.

And I think, I think there'll be some difficulty procuring coverage for some of these associations.

I think we'll see some, companies leaving the market.

Well, we have had a very robust conversation tonight.

Each of you has brought your expertise to the table, which we greatly appreciate.

We've all learned so much.

So before we go, I wanna just quickly go around the panel.

And each of you kinda give us, just a real quick takeaway, that people should be thinking about this evening.

Tom, I wanna start with you.

Well, my takeaway is, if you're interested in purchasing a condo, we talked about it earlier, bring somebody with you that can do an inspection for you that will not only just look at your unit, but will look at the building that the unit is in.

Make sure you do that.

And then where you can find papers from the homeowners association.

And we heard this loud and clear from Dawn and Ken, make sure that they're putting money away for maintenance.

If a building doesn't look like it's well-maintained, guess what?

It probably, you know, you can't put lipstick on a pig, but that's kinda the scenario you have there.

You gotta make sure it's being maintained well.

And if it looks right, it probably is.

Ken, a quick take away from you?

Sure, I would just encourage owners and the associations themselves, to again, provide the disclosure of maintenance and condition within the building.

And things should go pretty well from there.

So not doing that is not going to help your pricing.

So you might be a little reluctant, but if in the wake of Surfside and even without Surfside, you wanna disclose.

It's actually in your best interest as an owner to disclose.

And Dawn, you get the final word tonight.

I would say the disclosure piece that Ken mentioned, but I'll take it one step further.

I do think the real estate brokers and agents have a responsibility to make sure that their buyers are looking at those materials.

They understand those materials.

I've seen the materials that are distributed at a sale, at a resale of a condominium unit.

I've also seen that there'll be kind of a skip over of those documents.

They're important.

Look at 'em.

There are summaries.

There's some critical information in there.

And I think everyone who participates in that, in that closing and that re, that resell process, it has a responsibility for making sure that the buyer is educated.

I would also say, you know, legislators wanna make sure that they, that this doesn't happen in their backyard.

And their company, there are organizations around the country and in Florida that are having conversations about this.

We should encourage legislators to bring everyone to the table for these conversations so that what passes make sense, is practical, and really does do what it's intended to do, which is save people's lives.

CAI has a website with some resources, free resources for condo owners and condo buyers.

It's caionline.org/condosafety.

And I would encourage people to go there and get that free information.

You can watch the full town hall on our Facebook page @YourSouthFL.

We'll see you again next time.

As always, thanks for watching.