Florida Condos Could Be Abandoned Due to High Costs and New Regulations

Analysts have also warned that condo owners may soon begin to abandon their condos at an alarming rate because of these new high costs and fees — all from new regulations within the state.

Sadly, this might no longer be the case. With new regulations set to hit condo owners by the end of the year, many are being forced out of the homes they have worked so hard to afford. This is all because they cannot afford the new fees associated with these regulations.

This regulation was passed in the wake of the Surfside condo collapse in 2021, which tragically killed 98 people.

Certain features and designs also didn’t meet building codes, which may have escalated the collapse and subsequent tragedy.

As a result, these new regulations state that many Florida condos — such as those 30 years or older, or those that are more than three stories tall — must undergo essential inspections by the end of 2024.

If there is any evidence of structural deterioration during this inspection, a second, more in-depth inspection will be conducted. If there is no sign of deterioration, the next inspection will be conducted after ten years. However, if deterioration is found, the necessary repairs must be done within a year of receiving the report.

Many condo associations have also issued assessments for these inspections, telling various condo owners that they may have to cough up hundreds — if not thousands — of dollars in the next few months.

Furthermore, many condo owners in Florida are senior citizens and retirees on a fixed income. There’s no way they can afford these higher payments or fees.

Thousands of condos in Florida are now listed for sale — and experts say this number will likely rise as more owners list their condos. Though many are trying to sell their condos to get out of this situation, nobody seems to be buying.

These were listed in the second quarter of 2024. In comparison, just 8353 condos were listed in the second quarter of 2023. 90% of all these listings are buildings over 30 years old, as those are the ones most affected by the new legislation.

The only solution is to lower the costs. In June 2024, a condo would typically cost $316,700, which is 1.5% lower than what it cost in June 2023. Most condos lower their prices by at least 15%, but some are going much lower.

One condo owner bought their condo for $190,000. When it came to selling it, it was put on the market for $350,000. After getting no interest, they had to keep reducing the cost until they could sell it for $110,000, 42% less than what they bought it for.

One of these is the high insurance fees everyone living in Florida must pay. This is due to the Sunshine State being at risk of yearly hurricanes that cause a lot of damage to properties, and buyers simply don’t want to deal with all of these added costs.

This is because they know that if they buy a younger building, they won’t be hit with the extra fees. However, the issue for them is that the few younger condos on sale get snapped up pretty quickly, meaning they either have to wait to get a younger condo, give in and buy an older condo or buy an entirely different type of property.

This is after they have tried to sell them but without much luck. It is predicted that the fees could cost $100,000 per owner, which normal working people, let alone retirees, struggle to afford.

With the end of the year approaching, people are becoming increasingly concerned about how they will afford these new costs in addition to everything else.

Another issue is HOA fees. For example, Arkadiy Kats pays $340 a month for special assessments and $897 in monthly condo HOA fees. However, from 2025 onwards, he is expected to pay an extra $731 toward condo reserves.

On top of the cost of owning the condo, insurance and other costs, this six-figure sum is getting too much for some people. After seeing these costs, many see it as no surprise that condo owners want to sell up.

“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,” he explained.

Brandes added, “They are then forced to try to sell their condo or have a lien placed against their condo. And 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. And a series of cascading consequences.”

After all, nobody wants another tragedy to occur. However, Brandes has said that the timeline and deadline should be changed to help people.

He called on the legislature to enter into a special session, as they could change the deadline before the end of this year, which would help a lot of Floridians.

Instead of benefitting condo owners, it benefits condo associations and managers. One example is the Miami Beach hotel and spa Carillon, which can now get away with not paying a $16.3 million fee to the condo association. The new bill means the previous ruling no longer stands, with many questioning if there’s any point in this new bill at all.

He said, “The question is, what is a rational and reasonable timeframe for the inspections to be completed? How do we provide some grace if they’re not able to be completed in that time for whatever reason? How do we address this issue of immediately requiring capital to be infused? What is a rational time frame by which we have to put the capital in? Is it two years? I mean, could you come up with $100,000 for your apartment, for your condo in six months?”