New regulations requiring aging condos in Florida to undergo regular inspections and necessitating maintenance and repair works to make them safe and sound are making some residents fear for their personal finances.
Under the SB 4-D Bill passed in May 2022, Florida condos aged 30 years and older are subject to a first inspection by an architect or engineer by December 31, 2024. Should any evidence of “substantial structural deterioration” be found, a second, more detailed inspection should follow. Any necessary maintenance must be started by condo owners and associations within a year of receiving a report calling for work to be done.
The looming deadline has caused a surge in condo listings in the state, especially in Southern Florida, as owners try to offload properties that could soon cost them a hefty sum. In a recent report, ISG World wrote that there were 20,293 condo listings in the Palm Beach, Broward and Miami-Dade counties in the second quarter of 2024, up from 8,353 in the second quarter of 2023. Nearly 90 percent of those units are in buildings over 30 years old.
Retiree Ann Stiles told Newsweek that the situation for condo owners in Florida is “tragic.”
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“We are still under the gun to get the required items taken care of. We are doing and have completed some of them,” she said. “It is killing me financially, I am retired and because of my age, it is not easy trying to get a HELOC [Home Equity Line of Credit] or other financial assistance.”
Stiles thinks that condo management companies “need to be held responsible for this crisis.”
“Many of them ignored their fiduciary responsibilities to firmly encourage unit owners to keep up with reserves and other necessary repairs,” she said.
Stiles’ comments reflect concerns raised by former Republican state senator and president of the Florida Policy Project Jeff Brandes, who previously told Newsweek the December 31 deadline could be disastrous for retirees in the Sunshine State.
“It could end up leading to some pretty catastrophic outcomes where people are unable to raise the money to fund their required reserves by state law,” Brandes said. “They are then forced to try to sell their condo or have a lien placed against their condo.
“When this happens at scale, you could have potentially thousands of listings of condos, no buyers or very few buyers, uncertainty around the condos, banks refusing to lend to certain communities because of the reports and the underfunding to address those reports.”
This could result in a series of “cascading consequences.”
Most residents believe that the current situation is the result of longtime neglect from condo associations.
Jacqueline Wilson lives in an oceanfront condo in Florida’s Broward County built nearly 40 years ago.
“Seven years ago we replaced the board for the very reason that the building was in total disrepair and needed extensive renovation,” she told Newsweek. “We developed and implemented a plan, raised the money over the seven years, and are currently completing the final stage of the renovation. We have also completed the required inspection.
“The current situation is primarily the result of poor planning on the part of the condo boards and the state statutes that allowed condo owners to waive reserves. You can only kick that can down the road for so long.”
Michael, a condo owner in Dade County, who asked to keep his last name anonymous, said that while residents might not want to hear it, this long-term issue has been “ignored by retirees that only had their short-term finances in mind.”
“We have experienced several special assessments in the past, and the main reasons behind them were that residents previously resisted spending any money for maintenance and reserves and their main objectives were to keep the monthly maintenance fee as low as possible,” he told Newsweek. “They always voted down the necessary reserves and maintenance items necessary to keep the places up to date.”
Michael thinks that the Florida Legislature “did not create the crisis, rather they did the right thing in trying to protect the public from themselves,” he said.
“The older folks, and I am one, created this problem for themselves by refusing to maintain their properties properly and continually putting off necessary maintenance increases and reserves,” he said. “I would not want to see any public funds trying to bail out the folks that created the crisis in the first place.”
