Some uncertainty among potential
condominium buyers is brewing as they wait to see how the
latest state guidelines on condo safety play out.
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Uncertainty among potential condominium buyers is brewing in the market for some buildings as they wait to see how the latest state guidelines on condo safety play out. |
The law was passed
after the deadly Surfside collapse in June of 2021 raised
concerns across Florida about the structural integrity and
safety of older buildings. Champlain Towers South, built in
1981, collapsed right as its 40-year recertification was
due; ninety-eight people lost their lives.
“In the long-term, these safety inspection requirements are
a good thing. It’s going to add a considerable layer of
expenses that probably should have happened years ago,” said
Elliot Koolik, founding partner with the Koolik Group with
Compass in Boca Raton.
A key part of the law entitles buyers of certain buildings
to a copy of the milestone inspection of the building when
they enter into a contract, as well as a
structural-integrity-reserve study, which notes the amount
of funds needed to be reserved for future major repairs and
replacement of the condominium property, with certain
exceptions granted.
“In the older buildings, there are more buyers reserving
their decisions to see how this will play out. There are
people that are hesitating because they don’t want a big
expense without knowing it,” Koolik said.
Closed sales for condos have decreased overall when compared
to last year. In Palm Beach County, closed sales for condos
decreased about 21.4%, according to the Miami Realtors
Association.
Broward County’s condo sales decreased 28.7% year over year.
In Miami-Dade County, closed sales for condos decreased
43.8% year over year.
This uncertainty doesn’t mean the condo market is failing;
rather, the fall in sales can be attributed to a few
factors. There is the rise in mortgage rates, the slowdown
that has also affected the rest of the market, and
potentially a small part being hesitation from prospective
buyers, real estate agents said.
“In older buildings there might be some price depression,
and more people selling, but overall the market has been
pretty strong,” Koolik said. “In general, newer construction
is doing well depending on the price point you are looking
at.”
In light of the uncertainty in some areas or buildings,
there are things buyers and sellers can do to prepare and
work around it, Lichtenstein noted. It’s especially
important for a seller to know as much about the building’s
financials as possible and to disclose that information
upfront to the buyer.
Overall, there are still options for buyers looking to get
into a condo.“Just because a building is older, it doesn’t
mean that it needs a lot of updates. Many condo associations
have been diligent and they have stayed on top of this.”
Koolik added.