Article
Courtesy of The Miami Herald
An Opinion By
Gary M. Mars
Published May 5, 2022
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Questions regarding condominium safety have been in the
spotlight since the horrific Champlain Towers tragedy that claimed 98 lives.
The Florida Legislature failed to agree on any of the proposed measures
during this year’s session, but changes have been enacted at the federal
level from lenders and also at the local level from counties and
municipalities. Part of the reason the state legislature could not agree on
a set of reforms was because the new funding requirements for structural
repairs would have been too much for the unit owners of many condominium
communities to bear. Plus, financing options for both condominium
associations and their unit owners for such extremely costly property
restorations were getting worse by the day, as interest rates have been on
the rise and are predicted to continue climbing.
For a problem of this
magnitude and national scope, only the federal government
has the capability and resources to truly make an impact.
Its first effort at addressing it was proposed on April 18
by U.S. Reps. Charlie Crist (D-St. Petersburg) and Debbie
Wasserman Schultz (D-Broward, Miami-Dade) in the form of the
Securing Access to Finance Exterior Repairs (SAFER) in
Condos Act of 2022. Financing condo repairs The legislation
would allow condominium owners to finance critical building
repairs with loans backed by the Federal Housing
Administration (FHA). Unit owners would be able to combine a
special assessment from their association for structural
repairs with their existing mortgage debt into a new,
30-year loan insured under the FHA home rehabilitation
program. For those who do not have a mortgage or would
prefer to leave it as is and continue to pay it off, the
legislation also grants owners access to the FHA Property
Improvement Program to finance such an assessment over a
20-year term.
Such loans would
provide realistic options for many condo owners to be able
afford the large assessments that are sometimes necessary to
raise significant funds for major structural and life-safety
repairs. |
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Search-and-rescue teams looking for survivors at the
Champlain Towers South residential condo on June 29 in Surfside.
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Another measure that the U.S. Congress should consider
would be a financing program, either through the FHA or the Small Business
Administration, for federally backed low-interest loans for condominium
associations through participating lenders.
Community associations qualified for post-pandemic relief
loans through the SBA, and by sponsoring such loans for structural
improvements, the federal government would be providing insurance to lenders
against any defaults from small, not-for-profit corporations that exist for
the sole purpose of helping condo communities survive and thrive. For very
large structural improvement projects, such loans would enable associations
to secure low interest rates in order to help make their endeavors as
affordable as possible for their unit owners, who would then have the option
of deferring their payments through the new FHA financing options proposed
under the SAFER in Condos Act.
Avoiding catastrophe
As condominium associations and local municipal building departments
continue to increase their inspections and scrutiny of building structural
and life-safety elements, major projects to help bolster condominium towers
are sure to become more prevalent. Government-backed financing programs for
both condominium associations as well as their individual unit owners for
major structural-improvement projects would promote public safety and help
to avoid potential catastrophes, thereby serving an immense public good that
merits full government support. In today’s polarized political environment,
it will be essential for lawmakers from both sides of the aisle to
co-sponsor this legislation in order for it to gain the bi-partisan support
it will probably need for passage. The Community Associations Institute, the
leading organization representing the interests of community associations,
is working to get 98 members of Congress to co-sponsor the legislation in
honor of the 98 victims of the collapse. It and our firm are asking everyone
to contact their U.S. representative and encourage them to co-sponsor and
support the bill.
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