Q: In the wake of the
tragic Florida condominium hi-rise collapse last year, I
understand that Fannie Mae and Freddie Mac are now requiring
additional information about the safety and maintenance of
condominium buildings before they will guarantee mortgages.
If we as a board of directors of a condominium association
are asked to provide such information, what are our
obligations?
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Rescuers continue to search through the rubble of the Champlain Towers South Condo collapsein Surfside Florida on Monday , June 28, 2021 |
Frankly, we have seen too many
situations over the years where boards of directors have
been reluctant to spend the money to properly maintain and
repair the condominium project or would not otherwise build
up adequate reserves, so this may be a wise move on the part
of Fannie Mae / Freddie Mac.
While not a requirement in Michigan, other states such as
California require periodic reserve studies to be performed,
where an expert will examine the common elements and provide
estimates for when and how much will be required for repair
or replacement of each element.
The new requirements from the federal government seem to be
encouraging all condominiums to get reserve studies
performed, but again, check with your experienced
condominium attorney for a recommendation.