Florida’s Condo Crisis: A Slow-Motion Disaster Unfolding
Aging Condos Face Steep Special Assessments, Uncertain Future
A slow-motion crisis is unfolding in Florida’s condo market, threatening to upend the state’s reputation as a haven for retirees and reasonably priced beach living. Owners of older condos are bracing for steep special assessments, while racing to sell their homes and receiving only tepid buyer response.
Assessments and Repairs: A Delicate Balance
At the heart of this turmoil is a basic reality: Florida’s aging condo buildings desperately need repairs, and state officials are forcing them to assess (and pay for) those long-overdue upgrades. Under the “Building Safety Act,” condo boards must now set aside funds to fix the issues found in structural integrity studies, which must be completed by the end of 2024. This year, the tab for those repairs comes due, and the assessments on individual condo owners are looking both pricey and unsettling.
Special Assessments: A Growing Concern
“You’re going to see a massive reduction in the value of these buildings based on these giant special assessments and the work that has to be done,” said Orest Tomaselli, CEO of Strategic Inspections. In Florida buildings he’s worked with, Tomaselli has seen special assessments as low as $250 per month, to a property that levied $2,500 per month, per unit owner, for a three-year stretch.
Impact on Owners and the Market
The assessments result from inspection and repair mandates stemming from the 2021 Surfside building collapse that killed 98 people. “There are real people in these units that may be displaced, that may lose their nest egg and may lose tremendous amounts of value in their units,” Tomaselli said.
Condo Crisis: A Growing Concern
At Aventura’s Mediterranean Village, a waterfront condo complex with a marina out front, unit owners were hit with six-figure special assessments last year, some as high as $400,000, according to published reports. At Miami’s Cricket Club, a 50-year-old waterfront tower burdened with $134,000 special assessments per condo, 23 of the building’s 217 condos are currently for sale, according to brokerage Compass.
Condo Crisis: A Slow-Motion Disaster
The Summit Towers in Hollywood, FL is facing a $56 million assessment, which led to the ousting of four board members in a January election, in favor of new members who promised “a more moderate approach” to building up reserves, said Amy Greenberg, a broker and resident of the building with several listings there.
Conclusion
The condo crisis in Florida is a slow-motion disaster, with far-reaching consequences for owners, the market, and the state’s reputation. As the state legislature convenes its 2025 session, lawmakers may consider financing solutions to help condos cover the cost of structural studies and maintenance, including allowing reserve funds to be invested.
FAQs
* What is the “Building Safety Act”?
The “Building Safety Act” is a law that requires every condo tower in Florida aged 30 years or older to complete a structural integrity study by the end of 2024, to get a full grasp of what problems need fixing.
* What is the impact of special assessments on condo owners?
Special assessments can result in owners losing their nest egg and significant value in their units, as seen in the case of Aventura’s Mediterranean Village.
* What is the current state of the condo market in Florida?
The condo market in Florida is facing a crisis, with older condos losing value and struggling to sell, as seen in the case of the Cricket Club and Summit Towers.
* How will the state legislature address the condo crisis?
The state legislature may consider financing solutions to help condos cover the cost of structural studies and maintenance, including allowing reserve funds to be invested.
