By Daily Mail (U.S.) | Created at 2024-12-29 18:23:05 | Updated at 2025-01-01 16:13:28
2 days ago
Time is running out for Florida condo owners as they are set to see costs spike next year.
That is due to new safety regulations passed by state lawmakers in 2022.
The regulations, which were passed by Governor Ron DeSantis in response to the deadly Surfside collapse in 2021, require condo associations to have sufficient reserves to cover major repairs, and to conduct a survey of reserves every decade.
Buildings with three or more stories must file an inspection report detailing the expected costs for renovations before December 31.
This means that older condos, located largely in South Florida, are facing huge increases to association payments to pay for reserves and repair costs.
Residents of one condo building in Brickell, Miami, were left blindsided and financially overwhelmed after being served a huge $21 million bill for repairs last month.
The increased regulation has been met with a mixed response in the state. While many Floridians are relieved that it will mean homes are protected from further disasters, others are worried about how they will afford increased fees.
It comes as condo owners are facing a perfect storm of rising fees, soaring insurance costs, and falling home values, which is forcing many to try and flee.
A May report from the Florida Office of Insurance Regulation noted that the average homeowner's insurance premium is approximately $3,600, around $1,000 more than the national average, AP News reported.
Florida's state government approved a new law cracking down on older condos after the Champlain Tower South in the Miami suburb of Surfside crumbled in 2021
In Hallandale Beach, which is located between Fort Lauderdale and Miami, condo owner Kelli Roiter told AP that she sympathizes with people having trouble paying the higher fees.
However, she told the outlet she supports the new rules if it means her oceanfront building, which was built in 1971, gets the repairs it needs.
She said her building, a few miles from Champlain Towers South in Surfside, is showing some of the same problems that were visible before that building collapsed.
'I'm concerned that this building will collapse,' she told the outlet.
'There are nights I wake up hearing a creak, and I jump. And then I remind myself that, no, no, no, we're safe. But am I safe?'
Rick Madan, president of the Biscayne Neighborhoods Association, which represents 22 condo associations, said the law is bringing condo owners strife by forcing buildings to take full coverage and bringing forth a blanket solution that does not holistically address the crisis.
Madan told AP the law puts newer condos in the same category as much older buildings at the expense of the condo owners.
That is especially tough for people who retired in South Florida on fixed incomes, Madan added.
Democratic State Senator Jason Pizzo, who represented Surfside at the time of the collapse, said it is crucial there is transparency between associations and condo owners to ensure that the rising payments are truly related to repairs and not to amenity costs, and that it is done within a reasonable timeframe for residents' safety.
Nearly 90 percent of the 1.6 million condos in Florida are more than 30 years old, he added, and it is concerning that they have not had critical inspections.
Condo owner Kelli Roiter looks out her balcony at other waterfront high-rise buildings (AP Photo/Marta Lavandier)
Buildings with three or more stories must file an inspection report detailing the expected costs for renovations before December 31 (Pictured: Fort Lauderdale)
Miami, Florida's second most populous city, has seen a big drop in pending home sales due to the ongoing condo crisis
Luis Konski, a Miami attorney who deals with construction and commercial liability cases, told AP previous condo regulations kept fees low by failing to save money for future repairs.
Owners were then hit with special assessments when repairs finally needed to be done, he said.
Konski added that this encouraged many associations to ignore necessary but expensive maintenance, which is what likely led to the Surfside building collapse.
If associations can continue to delay maintenance with inaccurate surveys and minimal oversight, it is only a matter of time before another disaster, he said.
'It's a question of do you save money or do you save lives? You can't do both,' he said.
Real estate agent Rebeca Castellon, who owns a condo in Coral Gables, said she agrees with the idea of requiring condo associations to maintain reserves for future repairs, but acknowledges that the timing is bad when the increased fees are combined with higher insurance costs and recent inflation.
'I think part of the challenge is that right now there is tsunami of things that are really making it very challenging for condo owners,' Castellon told AP.
The condo market has cooled with the uncertainty created by additional fees and regulations, with home sales plummeting in five major Florida cities including Fort Lauderdale and Miami.
But real estate agent Gatien Salaun, who owns a waterfront condo in Miami Beach, told the outlet what appears to be a recent reduction in average sale prices is largely just buyers negotiating with sellers to eat some of the costs.
'They are simply asking for price reductions that are commensurate with that exact amount that they will have to pay over the next 20 years, 30 years in assessments,' Salaun said.
'And the sellers are somewhat stuck in terms of negotiating with the buyer or just paying for the cost themselves.'
