Time is running out for Florida condo owners as costs set to spike next year

Time is running out for Florida condo owners as costs are likely to rise next year.

That’s because of new safety regulations passed by state lawmakers in 2022.

The regulations, adopted by Gov. Ron DeSantis in response to Surfside’s deadly 2021 collapse, require condo associations to have sufficient reserves to cover major repairs, and to conduct a study of reserves every decade.

Buildings with three or more floors must submit an inspection report by December 31 with the expected costs for renovation.

This means that older apartments, largely located in South Florida, will face huge increases in association payments to pay for reserves and repair costs.

Residents of an apartment building in Brickell, Miami, were blindsided and financially overwhelmed after being presented with a massive $21 million bill for repairs last month.

The increased regulations were met with mixed reactions in the state. While many Floridians are relieved that this will protect their homes from further disasters, others are concerned about how they will pay the higher costs.

It comes as condo owners are facing a perfect storm of rising costs, rising insurance costs and falling home prices, forcing many to try to flee.

A May report from the Florida Office of Insurance Regulation noted that the average homeowner’s insurance premium is about $3,600, about $1,000 more than the national average. AP News reported.

In Hallandale Beach, located between Fort Lauderdale and Miami, condo owner Kelli Roiter told AP she sympathizes with people who are having trouble paying the higher costs.

However, she told the outlet that 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, has some of the same problems that were visible before the building collapsed.

“I’m afraid this building is going to collapse,” she told the outlet.

‘There are nights I wake up and hear a cracking sound, and then I jump. And then I remind myself that we are safe. But am I safe?’

Rick Madan, president of the Biscayne Neighborhoods Association, which represents 22 condo associations, said the law is creating unrest among condo owners by forcing buildings to get full coverage and putting forward a one-size-fits-all solution that doesn’t address the crisis holistically.

Madan told AP that the law puts newer apartments in the same category as many older buildings, to the detriment of condo owners.

That’s especially difficult for people who have retired in South Florida and are on fixed incomes, Madan added.

Democratic Sen. Jason Pizzo, who represented Surfside at the time of the collapse, said it is critical that there is transparency between associations and condo owners to ensure that the increasing payments are actually related to repairs and not the cost of utilities, and that this is done within a reasonable time frame for the safety of residents.

Nearly 90 percent of Florida’s 1.6 million apartments are older than 30 years, he added, and it’s concerning that they haven’t undergone critical inspections.

Condo owner Kelli Roiter looks from her balcony at other waterfront high-rises (AP Photo/Marta Lavandier)

Buildings with three or more stories must submit an inspection report detailing expected renovation costs by December 31 (Photo: 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 handles construction and commercial liability cases, told AP that previous condo rules kept costs down because they failed to save money for future repairs.

Owners then faced special assessments when repairs finally had to be made, he said.

Konski added that this prompted many associations to ignore necessary but expensive maintenance, which likely led to the collapse of the Surfside building.

If associations can continue to delay maintenance with inaccurate surveys and minimal oversight, it’s only a matter of time before another disaster strikes, 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, a condo owner in Coral Gables, said she agrees with the idea of ​​requiring condo associations to keep reserves for future repairs, but acknowledges the timing is poor when the higher fees are combined with higher insurance costs and recent inflation.

“I think part of the challenge is that there’s a tsunami of things happening right now that are making it really, really challenging for condo owners,” Castellon told AP.

The apartment market has cooled due to 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, owner of a waterfront condo in Miami Beach, told the outlet that what appears to be a recent reduction in average sales prices is largely just buyers negotiating with sellers to get a share of the costs to catch.

“They’re simply asking for price reductions proportional to the exact amount they’re going to have to pay over the next 20 years, 30 years of assessments,” Salaun said.

‘And the sellers are a bit stuck in negotiating with the buyer or paying the costs themselves.’