Is Vanity Driving Florida Condo Associations To A 2025 Financial Cliff?
In this latest issue of the Miami Condo Market Intelligence Report™, we examine whether Florida condo associations prioritize aesthetics over life safety measures and preventive maintenance.
Volume 2024, Issue 37 (Subscribe here)
This week’s Miami Condo Market Intelligence Report™ newsletter examines whether Florida condo association boards prioritize cosmetic details - such as lobby flower bouquets, hallway air fresheners and courteous but unqualified staff - over substantive issues related to mechanical, electric and plumbing (MEP) components.
Before discounting the notion that condo boards put aesthetics over safety, consider that the allegation comes from a veteran chief building engineer who has overseen the operations of condo towers, office buildings and retail centers in South Florida for more than 30 years.
Carlos Villanueva, principal of SeeWhyConsultingLLC.com in Miami, said many condo board members - who are all volunteers - usually have little to no experience running residential towers.
“What the boards do is, they will not get rid of what makes the lobby smell good,” Villanueva said during a recent interview on the third episode of the ”Special Report: Florida’s 2025 Condo Association Financial Cliff” podcast series. “They will not get rid of what's going to make the building look good because the other residents, that's what they see. Right?
“And so, nobody is going to know about the cooling tower being rusted out until the cooling tower fails because nobody's really going to the roof - and a lot of people don't even know what a cooling tower is.
“But boy, when they come home and that fresh bouquet of flowers - that's always at the concierge desk - isn't there, they're going to notice. Right? And so, the boards tend to appease the boards.
As a result, many board members prioritize aesthetics and superficial amenities, often at the expense of critical operational issues that demand attention.
When pressing issues do arise, Villanueva said all he can do is alert the property manager and hope the board members approve the necessary money to resolve the problems.
“I'm responsible for the whole building but I don't have any authority,” Villanueva said. “If one of my guys came to me and said, ‘Hey, I'm leaving and I need $1 an hour more. I wouldn't be able to give him the $1, even though he's a great guy. They haven't given me the authority to be able to retain guys based on being able to offer them more money. I'd have to go back through the proper channels to try to keep this guy.
“I wouldn't be able to just say, ‘Hey, you're a great guy. I can guarantee you the $1 or I'll give you $1.50 for you to stay because you know where all the valves are in the building. And so, you're getting a lot of that type of movement because people are going to move for an extra $2 or $3 because of the cost of living in Miami or in South Florida.
“And so, the associations really need to look at some longevity within their engineering staff or their maintenance staff because, you know, you might have 800 valves in a building. You may have 2,000 points that the fire alarm monitors. It takes a while to kind of get to know the internal infrastructure of a big community of a big building. Right?
“And let alone, you also want somebody that's going to be responsible and that's going to answer a 2 in the morning flood call.”
In the aftermath of the Surfside condo collapse, the safety of a condo tower coupled with the ability to pay for preventative maintenance is increasingly important for Florida’s nearly 28,250 condo associations with more than 1.2 million units.
For context, the tricounty South Florida region of Miami-Dade, Broward and Palm Beach have nearly 13,000 condo associations and about 610,000 units, according to a recent report.
This is the dilemma that Florida condo owners, buyers and board members are facing in the last three months before the looming 2025 Condo Association Financial Cliff.
In the aftermath of the June 24, 2021, collapse of the Champlain Towers South in the town of Surfside on the barrier island of Miami-Dade County, everyone from residents to building inspectors, politicians to bankers understand better than ever the importance of ensuring that no Florida condo building ever collapses again.
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 when many of the measures take effect.
Beginning in January, condo associations in Florida will be 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.
People are dubbing this moment as the 2025 Florida Condo Association Financial Cliff as it is expected to result in significantly higher costs for unit owners. News reports are already chronicling condo owners selling their units at deep discounts ahead of the 2025 deadline.
It is a lot of information but we are confident our reports will assist you to better understand current market conditions in South Florida.
It is worth noting that we are sharing a portion of our research for free with subscribers to our newsletter and readers of CondoVultures.com.
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If you are seeking information on condo resales in South Florida, please visit CondoVulturesRealty.com or call the office at 305.865.5859.
— Peter Zalewski, Founder of the Miami Condo Market Investing Club™
Story 1
Chief Building Engineer Reveals Secrets To Evaluating Condo Towers In Florida
Many Florida condo buyers and owners focus on aesthetics instead of the backroom operations that materially affect life safety measures and special assessments at associations.
Story 2
A Guide To Evaluating Florida Condo Towers Like A Pro
This is a list of seven excerpts from an interview with veteran Chief Building Engineer Carlos Villanueva of SeeWhyConsultingLLC.com in Miami.
Story 3
Should Florida Condo Towers Have An Expiration Date?
This is an excerpt from an interview with Chief Building Engineer Carlos Villanueva of SeeWhyConsultingLLC.com from the "Special Report: Florida's 2025 Condo Association Financial Cliff" series.
Story 4
Watch: How To Evaluate Florida Condo Associations Like A Pro
This a 75-minute video of the October 2024 Monthly Meeting of the Miami Condo Market Investing Club™.
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Miami Condo Market Investing Club™ To Host Next Meetup Event On Oct. 15
You are invited to the third Meetup event of the Miami Condo Market Investing Club™ at 5.30 pm Tuesday, Oct. 15 , at a neighborhood pub just west of Greater Downtown Miami.
This information is believed to be accurate and complete but cannot be guaranteed or warranted.
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