South Florida has long been a haven for homeowners seeking stunning beach views and year-round warmth.
However, recent state laws now require condos to maintain substantial cash reserves to cover major repairs and undergo inspections for buildings three stories or taller. These regulations are pushing more condo owners to sell their homes.
One example is Springbrook Gardens, a 1940s-era building in Fort Lauderdale with 18 units. Last September, residents were forced to vacate due to a deteriorating foundation. Now, the building’s owners are facing a difficult decision: sell, because they simply can’t afford the $4.5 million needed for repairs.
“It’s a terrible situation,” said Warren Sackler, a resident and condo owner. “We didn’t have $4.5 million to fix it. Nobody is happy about it. All 18 of us would love to stay here, but not with the debt and everything else.”
An Unaffordable Repair Bill
The $4.5 million required to fix the foundation would cost each resident hundreds of thousands of dollars, an amount they can’t cover. Instead of proceeding with repairs, the residents have opted to sell the property and move on.
This issue isn’t unique to Springbrook Gardens. New Florida laws are making condo ownership increasingly expensive, forcing many owners to sell. Real estate agent Jeff Chenore, who has been in the business for 30 years, says the situation is dire.
“We’re constantly getting calls from owners asking, ‘What should I do? How can I handle this?’” Chenore told CBS News Miami.
The Springbrook Gardens owners were offered $14 million for the property, but that amount isn’t enough for the residents. After the sale, the building will likely be demolished to make way for a new condo development. The hope is that it sells for a high enough price to allow current residents to find comparable housing. But for many condo owners in Florida, the new laws have created significant anxiety.
As Chenore puts it, “There are many condos on the market that just can’t sell.”
Rising Costs and New Regulations
After the tragic 2021 collapse of Champlain Towers in Surfside, which claimed 98 lives, Florida implemented stricter condo laws to prevent a similar disaster. Under the new regulations, buildings three stories or taller that are at least 30 years old (or 25 years old if near saltwater) must undergo structural inspections by the end of 2024, with follow-up inspections required every decade.
Additionally, condo associations are now required to set aside cash reserves to cover the cost of significant repairs, including the roof, load-bearing walls, floors, foundations, fireproofing, electrical systems, plumbing, waterproofing, and windows.
The challenge? Condo owners are being hit with special assessments to fund these reserves, and many can’t afford the added costs. On top of that, insurance premiums for condos are skyrocketing in Florida. As of September 2024, the average cost of a commercial condo association policy more than doubled over the past two years, according to data from the Florida Office of Insurance Regulation. These increases are passed on to condo owners, many of whom are already struggling to keep up.
Unsurprisingly, condo listings are rising across the state. According to Florida Realtors, new condo and townhouse listings increased by 5.5% year-over-year as of November 2024. This trend is likely to continue, as more condo owners find themselves priced out of the market.
Source: MSN