In the wake of the tragic collapse of Surfside’s Champlain Tower in June 2021, the Florida Legislature enacted laws in the next three sessions to address shortfalls in condo safety and governance.

Surfside was to condo safety what Hurricane Andrew was to construction standards in Florida.

Condo owners, though, have been left in a boxing ring, battered by punch after punch: special assessments for repairs, increases in property insurance and now, requirements for their buildings to raise reserves for future maintenance. Responding to a question at a July 25 news conference in Aventura, Gov. Ron DeSantis said he was open to a special legislative session to modify the law requiring condominium associations to have reserves for repairs. An architect of the legislation, Rep. Vicki Lopez, says a special session is premature because condo associations only need to include reserves in budgets adopted on or after Jan. 1, 2025. Thus, condo residents whose associations approve their budgets towards the end of next year won’t get hit in the pocketbook for reserves until 2026, she said. “I’ve been saying that I want to gather the data in early 2025 to see what to do?” said Lopez, Key Biscayne’s representative. “It’s hard to say that you want to fix a problem when you don’t have all the data to support fixing it. What would the fix be, right?”

Rep. Vicki Lopez, R-Miami, speaks at a meeting of the Key Biscayne Neighbors Association

Lopez said estimates are that only 30% of condominium buildings have completed their structural integrity reserve study (SIRS) that would inform them how much money is needed for eight categories – roofing, fireproofing, etc. – spelled out by SB 154 signed into law in June 2023.

 

After Surfside, lawmakers required condos 30 years or older and three stories or higher to undergo “milestone” inspections. The state also required the new structural study to bolster long-term maintenance – a big issue for Champlain Tower in Surfside where 98 people died.

The statewide practice of letting condo boards kick the can down the road ended with SB 154. However, DeSantis’ comment may indicate that some lawmakers have second thoughts during an election year.

“Nobody wanted to make the hard decisions to move forward with repairs or maintenance,” Lopez said. “I think the Legislature is trying to balance structural safety so that we never have another building collapse.”

DeSantis blamed the media for demanding action too soon after the Surfside collapse

“The Legislature did this, they did hearings and stuff and I was like OK, fine,” DeSantis said. “But there was always the possibility that there could be unintended consequences, so they owe it to their constituents to listen to them, to figure out.”

Condo law expert Dana Goldman said horror stories about assessments are fueling panic among owners as associations get ready to make long-delayed repairs.

“I think this idea that people are facing $50,000, $100,000, $200,000 in massive special assessment obligations, and now to kind of compound that with a mandatory reserve, is just too much,” she said.

For example, Miami’s Cricket Club’s condo board proposed a nearly $30 million special assessment for repairs – around $134,000 per unit owner.

In a red-hot South Florida housing market, condos built in 1994 or earlier are just not moving as owners – hit with these massive costs – are trying to dump them – and finding resistance from buyers.

“Now with anything older than 30 years in condos, buyers are a little bit more concerned about the reserves and maintenance that may have been deferred and what may come up in the future,” said Monica Steinmuller, a real estate agent in Key Biscayne.

The condo market in South Florida has been over-valued for years some would argue, because maintenance costs were being deferred. Now that assessments and reserves are part of the equation, those costs are very much part of any sale, Steinmuller said.

“The negotiation is much more in-depth now than it was before,” she said.

Jeremy Gauger, Key Biscayne’s building, zoning and planning director, said he isn’t surprised there is talk about a special legislative session. “I think this is having a pretty profound effect on property sales and ultimately values,” he said.

At Ocean Village Condominium, Carlos Mendia – the association president – said this choke point between safety and money was bound to happen. He said the Legislature may need to consider pushing back the requirements or providing some type of financing or even tax relief.

“They have to do something because there are going to be people hurting out there,” he said. “And they are not going to allow real estate prices to go down.”

Ocean Village had been an early adopter – with the equivalent of the SIRS study starting even before Surfside, said Mendia, adding the crisis really isn’t affecting Key Biscayne..

“We had a large assessment that we did in 2022. Why? Because we had not been funded over the years,” said Mendia, declining to give the cost per unit.

“Now, if we hadn’t done this in 2022, oh, yes, it would have been a big number. And that’s what’s happening with some of the buildings.”