MIAMI (AP) — Florida condominium owners are eyeing higher fees from their condominium associations in the new year due to a safety law passed by the state Legislature in 2022.
The law requires associations to maintain sufficient reserves to cover major repairs and to conduct a reserve review every 10 years. Because of the law, state records show older condominiums, primarily in South Florida, face significantly higher payments to associations to cover reserves and repair costs.
Gov. Ron DeSantis signed the law in the wake of the partial collapse of the Champlain Towers South in Surfside in June 2021, which killed 98 people. The new regulations require condominium associations for buildings over three stories to submit inspection reports that focus on structure and maintenance. and the cost of anticipated repairs or renovations through December 31st.
This report is just one part of the larger problem of Florida’s condo and real estate insurance crisis. A May report from the Florida Department of Insurance Regulation found that the average homeowner’s insurance premium is about $3,600, about $1,000 higher than the national average, according to the National Association of Realtors.
Hallandale Beach condo owner Kelly Reuter said she sympathizes with people struggling to pay high fees, but she also wants to make sure her waterfront building, built in 1971, needs repairs. He said he would support rules that would require associations to maintain a repair reserve fund in such cases.
She said her building, located a few miles away from Champlain Towers South, is exhibiting some of the same problems she saw before that building collapsed.
“I’m worried that this building will collapse,” Reuter said. “Some nights I hear a creak and wake up and jump. And I say to myself, no, no, no, we’re safe. But am I safe?”
Rick Madan, president of the Biscayne Neighborhood Association, which represents 22 condominium associations, said the law would discourage condo owners by forcing full coverage of buildings and offering blanket solutions that do not comprehensively address the crisis. He said it was causing discord.
Madan said the law puts new condominiums in a category that requires the same reserves, inspection reports and recertification as older buildings at the condo owner’s expense.
Madan added that the situation is especially tough for retirees on fixed incomes in South Florida.
“You’re trying to make us do all these preliminary studies,” Madan said of the Florida Legislature. We need to raise a lot of money.” “And what’s more, the insurance company basically takes out a $100 million policy and they know they won’t have to pay out a claim, so they’re basically making a lot of money, and the insurance company is doing nothing. It doesn’t give you that much flexibility.”
Democratic state Sen. Jason Pizzo, who represented Surfside at the time of the bankruptcy, said he agreed with Madan’s points about property insurance.
Mr. Pizzo and Republican state Sen. Jennifer Bradley held a condominium summit in early December to warn of transparency among the groups about the cost of repairs needed to prevent damage to the structures.
Pizzo told The Associated Press that the association is working to ensure that the increased payments are truly related to repairs, not amenity costs, and that they are done within a reasonable period of time for the safety of residents. said it’s important to be transparent with condo owners.
He said it’s natural to worry about anticipated costs, but that’s why objective inspections of older buildings are needed.
Pizzo said it’s concerning that nearly 90 percent of Florida’s 1.6 million condominiums are more than 30 years old and lack critical inspections.
“They will undergo milestone inspections that may result in the need for immediate repair or replacement,” Pizzo said. “It’s not really an operation of the law. It’s an operation of common sense.”
Luis Konski, a Miami construction and commercial liability lawyer, said previous condominium regulations kept fees low because they didn’t save money for future repairs that ended up needing repairs. When this happened, the owner was subject to a special assessment. Konsky said this likely led many organizations to ignore necessary but expensive maintenance, which led to the Surfside building collapse.
He said he doesn’t know if the state has actually committed enough staff to make sure associations are following the new rules. Pizzo expressed similar concerns, and the Florida Department of Business and Professional Regulation began reviewing structural integrity and inspection reports while continuing to regulate all parts of Florida business, including licensing and code enforcement. He said the law may need to be amended to allow this.
Konski said if the association continues to delay maintenance with inaccurate surveys and minimal oversight, it’s only a matter of time before another disaster occurs.
“It’s a question of saving money or saving lives,” Konsky said. “You can’t do both.”
Rebecca Castellon, a real estate agent who owns condominiums in Coral Gables, agrees with the idea of requiring condominium associations to maintain a reserve fund for future repairs, but said she is concerned about higher fees and higher insurance premiums. He acknowledged that the timing was poor given recent inflation. .
“I think part of the challenge is that there is a tsunami of things that are now very difficult for condo owners,” Castellon said.
Although the condo market has been dampened by the uncertainty created by additional fees and regulations, Castellon said condos remain the most affordable form of home ownership and new regulations will provide buyers with more information going forward. He said that only.
“I wouldn’t be surprised if in the future a buyer requests to look at the current structural inspection of the tower and take that into account to consider whether it is the right property for them. I think, ‘Make me an offer,”’ Castellon said.
Gatien Saraun, a real estate agent who owns waterfront condos in Miami Beach, said the recent decline in average sales prices appears to be largely due to buyers negotiating with sellers to cover some of the costs. He said that he was just
“They’re just looking for a price reduction commensurate with the next 20, 30 years of valuation,” Saraun said. “And sellers are somewhat stuck in terms of whether to negotiate with buyers or just pay the costs themselves.”
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