new codes / old building

I hope someone out there can help us with a major dilemma.

Our Florida condo is about 40 years old, 13 stories and 2 elevators.

During our last annual elevator inspection (around June) we were advised that any elevator installed prior to 1987 in a building more than 75 feet must be brought up to current code.

We hired an elevator consultant who gave us a ball park estimate for making the required changes. He further advised us that making those changes would necessitate completely updating the buildings fire system to meet code and that ADA code requirements must also be met. We have confirmed these requirements with other consultants, the fire Marshall and the Bureau of Elevator Safety

These are the main changes we must make:
1. Door restrictors to insure doors will not open if elevator is over 3" from floor
2. Telephone service (there are no phones now)
3. Fire service to send elevators to ground floor in the event of a fire
4. Elevator fire service must be tied to the main panel of our buildings fire system. Our current system is too old to be compatible with the new required elevator system. Therefore we have to update the building's panel and that requires we update the entire fire system.
5. Update tamper switches for fire sprinklers
6. ADA requires an alarm device be installed in each bedroom
7. Elevator buttons must be lowered and railings installed
8. Update elevator room

To make a long sad story as short as possible, although we have some reserve funds for elevator and safety, we expect that it will cost us an additional $450,000 to $550,000 to make the changes...up to $5700 per unit. Our monthly maintenance fees are about $350 and a special assessment to cover the code updates will add about $475 to that fee (for 12 months).

To make it worse, we will need another special assessment in the next year or two of another $500,000 to replace balcony railings in order to ensure the cathodic protection we installed to prevent deterioration of our balconies works properly.

The notice of special assessment went out last week, and already we have had several homeowners (many of our homeowners are on fixed income) tell us they simply cannot make the payments and would be forced to sell...we already have about 12 units out of 97 for sale and one is in foreclosure.

We have written to the state asking for a hardship variance, but have received no reply.

Of course, now we have no certificate for our elevators and have been advised that we are subject to a $1,000 per day fine.

My questions are:
1. Do we have any options here?
2. If we presented the state with a four or five year (or more?) timeline to accomplish this, pleading hardship, what are the chances they'd agree?
3. It has been suggested that even if we did nothing, the state would take no action against us – is this likely?

Any input will be greatly appreciated!
Original Post
Thanks for your reply. Please clarify about our legal council - are you saying that they should/might be able to get a variance?
To whom would we apply for a grant?
Re the Board, we do have a reserve fund for elevators, but in expectation of another 15 yrs or so of "life" it is not fully funded..and the fire system likewise. Also, how would the Board have been able to anticipate this? Is there some central source of planned code updates that we can access regularly for future isssus like this? Again, thanks for taking the time to help us. By the way our attys are Becker & Pollikoff out of Miama - and I think they specialize in condo law.
If they specialize they should be keeping you a brest of changes.

In CA assoc's are required to conduct a reserve study every 5 years. Is this required in FL?

Doesn't your local FD inspect the building every year?

Do you have condo associations in FL? They know of these things, what of FL real estate commission?
Faith...

Reading between the lines there are some aspects not quite clear.

You state you no longer have elevator certificates. Unless there is a significant immediate safety hazard it would seem unusual for the certificates to be pulled. Customarily, 'upgrading' to new code requirements is a process that involves adequate notice and time to prepare a remediation plan, and a window for making the actual changes.

Nevertheless, you need a practical solution. You need a meeting with the officials that are in a position to make determinations on what things do and do not need to be done, and in what time frame. These officials are not your enemies, and do understand the difficulties involved. You need a knowledgeable consultant to assist you in navigating this unfamiliar territory.

Unless you can obtain some kind of relief, you will clearly need to address the issue and this will require significant funds. Time relief can be obtained by appealing to the local authorities for a reasonable time window for addressing the 'violations'. But, if the upgrading is actually a mandatory requirement, it is doubtful you can avoid it only because you did not have adequate advice in advance or because it will be expensive.

Raising assessments to a level at which it will result in 'defaults' in HOA dues is counterproductive. If owners default you not only will still lack the funds for the work, you will also need to institute legal actions to collect the delinquent dues - and this will further drain your resources. I suggest you get together with your Property Manager and Counsel and explore a financing program. These advisors should already know which lenders in your area offer funds for major capital improvements - secured by future HOA dues. This will allow you to spread out the costs over several years (limited by what you can negotiate in the loan package). This makes the monthly pass-through to owners more palatable, although still painful.

In California, the Board also cannot raise the dues so signficantly/rapidly without consent of the owners. I do not know the limitations in Florida, and you do not state if this was brought to a vote of the overall membership.

You will have plenty of time later to looking backwards and determine why you are in this pickle. Does your Association have a property management firm on board handling your affairs? Does your association have a General Counsel that advises on legal requirements on an ongoing basis? Has the Association engaged a consultant to update its Reserve Plan periodically (this is the basis upon which assessments are adjusted from time to time, and should have included requirements to upgrade elevator systems, if in fact this is a mandatory requirement in your jurisdiction)? Has the Board developed any kind of working relationship with the Fire Department and local Building Department over the past 40 years - and if so, why didn't anyone seem to have any inkling this was coming along as a major capital project requirement? Is the Association a member of a local or state condominium association/group that provides 'heads-up' information on these types of mandatory requirements - or provides assistance or guidance on how to resolve same (i.e. how other associations have dealt with this - since there are many others built in the same time frame and would be facing this same situation)?

You obviously will need expert assistance, and my suggestion would be to get the best talent available. If they still maintain an office in Florida, a firm like PinnacleOne would have the people on staff that could analyze the situation and assist you in dialogue with the involved agencies - and they maintain close relationships with the most knowledgeable attorneys as well as lenders. In any case, you need to carefully vet anyone you engage to assist you, to make sure they have on-point experience in resolving similar situations. I again also recommend that you do not view the local authorities as enemies, and instead meet with them with open hands and enlist their assistance/guidance on how to soften the blow, and how to obtain more time to comply.

Best of luck...
hil
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