No bailouts as some condo owners hoped
The Port Royale Condominium in Miami Beach. Courtesy Google Earth
Here at LMA we’ve been closely covering Florida’s ongoing condominium problem and have new developments to report. At issue are state laws passed two years ago that address condo safety by requiring milestone building inspections and structural integrity reserve studies. Some condo associations have struggled to comply, citing cost. It’s led to a sell-off on the real estate side, as condo unit owners are being increasingly priced out of their own residences through higher monthly maintenance fees and/or assessments, which include higher insurance costs for some riskier high-rises. The problem is, and continues to be, that no one is buying in such a tumultuous market.
Condo sales in Florida are at a 10-year low and the median price has continued to dip, according to a report by Florida Realtors. This stalemate has put a damper on the condominium lifestyle that once meant a carefree retirement down in beautiful Florida but has now shifted to who will foot the bill to bring some of these decades’ old buildings into the 21st century. Such is the trend we’ve seen since the deadly 2021 Surfside collapse that kickstarted much of the new condo scrutiny – oftentimes building owners skate around safety checks and maintenance and it is the condo owners themselves who pay the price.
Crestview Towers residents were able to retrieve belongings from their condo units with the assistance of local police officers, after an emergency evacuation order, July 11, 2021. Courtesy North Miami Beach Police Department
While some condo associations are taking charge and beginning the long road to update their buildings, others have and continue to miss county and state deadlines. For example, the Sun-Sentinel reports around a sixth of the 500 eligible buildings in unincorporated Palm Beach County still have not submitted inspection paperwork that was due by December 31 of last year. Local leaders have speculated on the reasons for the missed deadlines, but invariably, many of the associations and owners simply do not seem to have the cash to pay for the years of ignored wear and tear. “Everybody I talk to right now is like, ‘We can’t afford these assessments,’” Doug Wise, Director of Palm Beach County’s building division, told the newspaper.
The increased costs and pleas for potential condo bailouts have been part of panel discussions in the Florida Legislature this year, culminating in several filed bills:
- SB 690 by Senator Rosalind Osgood (D-Tamarac) would relax the laws by requiring integrity reserve studies only for buildings six stories or higher (instead of the current three or more stories) and allow condo associations of buildings five stories or less to waive or reduce reserve contributions with a majority vote of unit owners. The House has a comparable bill, HB 1415.
- HB 913 by Rep. Vicki Lopez (R-Miami) would bar state-backed Citizens Insurance coverage for any condos that fail to comply fully budgeting for repairs after milestone inspections. It also allows associations to move ahead with special assessments without the approval of membership to cover repair costs, along with other provisions. The bill has no House companion.
- SB 592 by Senator Tom Leek (R-Ormond Beach) would restrict the use of grant funds in the My Safe Florida Condo Pilot Project to those buildings three stories or higher, to help pay for structural fortification against storms. The bill has its first hearing today (March 3) at 1pm before the Senate Banking and Insurance Committee. The House has an identical bill, HB 393.
Florida has more than 912,000 condominiums aged 30 years or more, some needing significant repairs. At this point though, it appears that legislative leaders simply have no appetite for bailing out condo associations and owners for maintenance that they should have budgeted for.
LMA Newsletter of 3-3-25
