In a word
--- YES. Are all these new laws really necessary? In a word
–YES. This is all happening due to a complete lack of
foresight and planning by The Florida Legislature.
Mandatory Reserves and Mandatory Inspections should always
have been the law. I urged The Florida Legislature in May
of 2018 to make reserves mandatory. Instead they waited for
a building to collapse and for 98 people to die before
making these common sense laws. Of course a building should
require an inspection after 25 or 30 years. Of course a
building should be required to make necessary repairs to
prevent a potential collapse. Of course a building should
be required to put away money each month for future
repairs. Of course that amount should be determined by a
professional architect or engineer and not an unqualified
board member who has a financial interest in the outcome of
the reserve study. These laws should have been required
thirty years ago, as building started to boom. Instead
however, The Florida Legislature always caved to the
developer lobby in order to keep the cost of living in a
condominium artificially cheap, and the sale of units
flowing. Now, because these laws were not in place thirty
years ago, current condominium owners have a lot of catching
up to do financially to pay for the sins of the past.
The days
of a couple or a widower from up north retiring to a high
rise condominium in Florida if their sole income is social
security are done and over. That cannot happen anymore.
They need to look for a condominium less than three stories
in height that has some reserves put away.
If your
condominium is at least 30 years old and is 6 stories or
higher, has no fire sprinklers or Engineered life safety
system, has not yet undergone a Mandatory Phase One and
Phase Two Inspection, has not made the repairs required by
those inspections and has no reserves in the bank, you are
now forced to either sell your condominium unit immediately
or pay massive special assessments that you may not be able
to afford, or even come close to affording it.
On the
flip side, if your condominium is at least 30 years old and
is 6 stories or higher, and already has fire sprinklers or
an Engineered life safety system, has already undergone a
Mandatory Phase One and Phase Two Inspection, has already
made the necessary repairs, and is fully funding reserves,
you have little to nothing to worry about. Your monthly
assessments should remain where they are, give or take the
increases in insurance that are simply astronomical.
Developers are waiting to pounce. They are focusing their
attention on those condominium at least 30 years old and are
6 stories or higher, but has no fire sprinklers or
Engineered life safety system, has not yet undergone a
Mandatory Phase One and Phase Two Inspection, and has not
made the repairs that will be required by those inspections
and has no reserves in the bank. Developers will be
approaching the Boards of these condominiums with offers to
buy everyone’s unit for a certain price. You will either
consent to selling or have to pay the costs for all these
inspections, repairs and funding of reserves. For many
there will be no choice at all. They will have to sell and
somehow find housing elsewhere.
Like
everything else, the poor people or even the average workers
who had saved up enough money for a down payment on their
condo and proudly purchased their unit, they will get hit
the hardest. In reality, in upper class buildings, they
were either putting reserve money aside all along, or worse
comes to worse they can stroke a check for these increased
costs. They’re OK.
This will
take years to sort out. Some condos simply won’t be able to
comply with the new laws and the owners will sell out to a
developer. Some condominiums will opt not to sell and pass
massive special assessments and/or borrow the money from a
bank. Either way their expenses are going up. Many
associations will be foreclosing on many of their owners who
can’t afford these special assessments. I can tell you that
even before these massive changes go into effect,
foreclosures are already on the rise, simply due to nearly
$6.00 per gallon of gasoline and out of control food
prices. These new laws will start what I believe will be a
tremendous increase in foreclosures, perhaps as bad as 2007
and 2008. Yet, all of it is necessary. You can’t allow
buildings not to get inspected, you can’t allow building not
to get fixed, you can’t allow buildings not to have fire
safety measures and you can’t allow buildings to
deliberately waive a requirement to put funds away each
month for future structural repairs.
The Band
Aid was ripped off in one shot. As a result, Florida
condominiums and their owners will have some tough financial
times ahead. There will definitely be gentrification in
some neighborhoods. The look, feel and face of Florida will
change going forward. If only these measures were passed
when these buildings were being built so people would not be
forced out of their homes today. There simply was no
foresight and now the change won’t be smooth and gradual,
but will be difficult and immediate. And yet, there’s no
other way to go. A collapse like Champlain Towers can never
happen again.