New laws pushing the cost of some Florida condos way up

Tough situation all the way around. Need to have safety regulations in there for sure to prevent another such incident from happening again but it really hurts those on a fixed income. Not sure there is a good solution for all parties.

 

Big corps are going to swing in and buy these affected condos at fire sale prices. They will take over a sizeable chunk of the condo rental market.

I will say, however, that some of these condo owners help create a related issue. They constantly voted not to fully fund their reserves to have lower maintenance fees and can no longer do that.

I owned a time share at South Seas on Captiva for many years and sold it a couple of months before Ivan (at twice the original purchase price.) We voted to not fully fund the reserves EVERY year. The poor people who purchased it have maybe got to use it one year. They are now getting hit with assessments to fully fund the reserves and, per South Seas' website, the entire resort is closed again due to hurricane damage.

 

Hmm, I wonder if there is an avenue for suits against the associations for not having adequate reserves. I've never thought buying a condo was a wise move, and this more or less confirms it. Unfortunately, Florida is in dire need of more dense housing, and making condos a debacle wont help there.

 

Really sad situation. It's the result of years if not decades of deferring necessary repairs and/or failing to adequately fund reserve accounts in order to keep monthly condo fees low. Not sure if there is really a solution to the problem. I agree with @GatorJMDZ , corporations and specifically private equity funds will come in and purchase the condos at fire sale prices possibly leasing them back their former owners.

 

It’s the right thing to do.

Where they have huge bills, that tells me good possibility of years of neglect. A lot of times that isn’t coincidence. Owners often have a say or may even oust board members who would do assessments to boost reserves or carry out repairs that aren’t budgeted.

Kind of like paying taxes in a way. It’s a metaphor for politics. Pretty easy to run on a condo HOA platform of keeping dues down or “fiscal responsibility” vs guy proposing a $10,000 assessment to do an engineering study which may lead to even more costs. But what “fiscal responsibility” guy doesn’t get is in the end it may lead to a total loss. Guess some probably don’t care so long as it’s somebody else holding the bag 20 years down the road.

 

The problem is if you are suing the condo association as an owner you are in effect suing yourself and the other owners. Where would the money come from?

 

I think the suit would just to be to remove the obligations to pay the assessment. Unit owners suing the board(s). You could probably get a class action if there are enough associations doing this. But what do I know, I have no legal training lol. Perhaps they would be better served to seek relief from the state government. There are probably enough interests out there not wanting to see the condo market collapse. And most of the people mentioned in the article arent exactly working class stiffs renting, but retirees and pensioners who at one time had means and still own property.

 

I know with our HOA, you can disagree with the board and ask for a legal opinion (from the HOA's attorney). Yes, it costs money, but it is significantly less than an actual lawsuit. If the board's interpretation of the legal opinion seems suspect, you can make a request for the state to get involved (that process does not directly cost any extra money for either side).

Go GATORS!
,WESGATORS

 

they finally got approval to raise the buildings. Height limitations are a problem when elevating buildings. will be total rebuilds, hopefully insurance covers it all but you are right about the source of the problem.

these are just chickens coming home to roost. people delayed and delayed and the state let them and a building fell down because there were no responsible adults in the room making decisions. state never should have allowed buildings to be able to not fund reserves.

 

The owners are the association. You’d be suing yourself. And Florida law didn’t require it. The board of directors put the vote to the owners, many of who voted not to fully fund reserves.

Where a new owner has a legal gripe is if the condo association/board said reserves were fully funded before buying.

Disclosure issues have been falsified or not disclosed at all.

The older long time owners are SOL and it’s mostly their fault.

 

My Florida condo is from the 60’s and is a mix of wealthy owners who have renovated their space and have money to fix the common areas and people who’ve been there for decades living on a shoestring budget who have no interest in spending a dime. Makes for lively HOA meetings.

The list of issues and the ensuing assessment to get a passing grade will likely chase out many people. Seems like an opportunity for people with money at the expense of those without - so a normal day in America.

 

I would counter that the law allowing for deferred reserves created an opportunity for people to live beyond their means. every dollar they deferred is a dollar they borrowed from t themselves to afford their slice of paradise and the bill is due.

 

Yea. That does make a lot of sense.

 

Classic pay me now or pay me later.

 

My South Seas (Plantation Beach Club) HOA made it really easy not to fully fund the reserves. When the proxy ballot came in with the question whether to fully or partially fund each year, it also set forth the numbers both ways. The fully funding option was many hundred dollars more and the annual fee with only partially funding was already at $1500/year for my one week.

 

I used to be the owner of a condo (more of a townhouse style, not a high-rise). They had a bad habit of partially funding reserves at 50% of what was needed. However, what was "needed" would be based on whatever it cost the last time they painted, re-roofed, etc., even though those prices were 10-15-20 years out of date. Then, when it was time to do maintenance, they'd only have maybe 25% of what was needed to do the actual work. When Hurricane Wilma hit and the roofs were damaged, it was a godsend, as that was a 7-figure insurance payout to replace the aging roofs which would have needed attention in the ensuing years.

Interestingly enough, more that once the annual budget meeting was delayed/rescheduled, so they could get enough unit owners to vote for partial funding of reserves. Without a majority vote, the budget would have defaulted to 100% funding. But nobody wanted to put up the money. So they'd knock on doors and get enough people to show up to the meeting to make sure they could go with the lower number.

Was quite happy to sell and get out of that arrangement.

 

Like everything else, this upkeep fee is a can that been kicked down the road. $100,000 in fees is probably because the owners should have paid $3,000/yr more in fees for the past 30 years to build reserves. But Condo associations had the option to waive reserve requirements, so they did...

Edit... I see it's already been mentioned.

 

Good, demo them down. They are an eyesore, and block access to the beach.

 

It's difficult. I am on the board of directors for my office condo association and it's an impossible task to balance between having adequate reserves and keeping monthly maintenance fees in check. As a result, we have probably too many special assessments for big ticket items like recently completely repaving our parking lots. We were just presented with a $10K increase in our property insurance bill (zero claims) and decided to eliminate trash removal from the units to offset that additional cost. People were, of course, upset that they had to walk all the way out to the dumpster, but they would been have more pissed if we jacked the assessment again.