Florida Condo Living Is About To Get Safer But Can Anyone Afford It?
In the aftermath of the Surfside condo collapse, the Florida Legislature has made a number of changes to the state's condo law in 2024. This is one of the changes.
Florida condo associations will theoretically become safer just five months from now.
How can that be? Money.
A whole lot of newfound cash is expected to flood into association coffers as part of every Florida condo community’s upcoming 2025 budget.
Unit owners will be expected to pay higher and higher maintenance fees and special assessments to cover the costs of current and future capital expenditures as well as maintenance work that has been deferred.
The unanswered question is, will the cost of safer buildings make condo living unaffordable for existing and hopeful unit owners, alike?
Beginning in January 2025, condo associations in the state are required to start collecting money from unit owners to place into reserve accounts that will be used exclusively to fix, maintain and improve the structural integrity of residential buildings that are at least three-stories tall.
The reserve funds - and all accrued interest - that will begin to be collected in January 2025 must be used by the association boards to address specific issues with their respective condo buildings.
How would condo board members even know what is wrong with their buildings?
Florida is requiring nearly every association to hire experts to conduct condo building check ups, of sorts, called Structural Integrity Reserve Studies (SIRS). The SIRS are required to be completed before associations begin their 2025 budgets.
These new reserve account requirements are part of an ongoing effort by the Florida legislature in the aftermath of the Champlain Towers South condo collapse in the barrier island town of Surfside on June 24, 2021, to bring more transparency to condo associations, which have a reputation for being shrouded in secrecy, intimidation and corruption.
Nearly 100 people died and a $1 billion settlement was reached with the families of the victims.
A federal investigation is currently underway but the preliminary reports suggest a flawed design coupled with a lack of upkeep by the condominium’s association contributed to the disaster.
The Florida legislature has taken a number of steps - prompted by insurance companies threatening to withdraw coverage in the state - to ensure that nothing like this ever happens again.
Up until now, the state’s measures were being implemented slowly but that all changes in 2025.
Watch and/or listen to the four-part narration of the 2024 revisions to the Florida Condo Law
As part of the changes, condo boards are rushing to comply with a recently passed Florida law that goes into effect in January 2025. The law requires associations that were built before July 2022 to conduct and complete a SIRS on their respective communities by the end of 2024.
Based on the SIRS results, condo associations are required to begin funding the necessary work in their 2025 budgets. Unlike previous years, associations can no longer defer the work and the cost under the law.
People are dubbing this moment as the 2025 Condo Association Financial Cliff as it expected to result in significantly higher costs for unit owners.
Some industry watchers have compared it to an inflection point on par with the Category 5 Hurricane Andrew that devastated South Miami-Dade County in August 1992 and led to more stringent building code requirements in South Florida.
Since the 2021 collapse, older units are said to be tougher to sell, insurance prices are spiking year-over-year and association maintenance fees and special assessments are squeezing owners to the brink.
To read the rest of this report or to watch a video narration of this part of the law, you will have to be a member of the Miami Condo Market Investing Club™. As a Club member, you will have access to the rest of this report as well as all of our published reports, statistics and proprietary research.
Please note, we are not attorneys and only attempting to understand the Florida Condo Law. If you have any legal questions, please consult your attorney for legal advice.