Live in a Florida Condo? New Law may impact Condo Reserves....Significantly (Miami: transplants, apartments)

[FLCrescentBeach]

Never buy any condominium/horizontal property regime (ex. only) in Florida.


Fees and restrictions will Kill YOU.

[SanyBelle]

Originally Posted by 1insider

Are any of your reserves specifically designated for concrete/structural repairs?

I don't know yet, I'm sure I'll find out in the future.

[City Guy997S]

Originally Posted by wizrap

Exactly. I used to live in a condo in West Broward, so not on the ocean, and when special assessments were levied, some of my neighbors had to finance them, rather than paying one lump sum.

I had neighbors whose HOA fees were nearly double mine because they didn’t have the spare cash.

I also think condo prices will drop a lot.

I think old, underfunded buildings = discount prices

Well managed buildings (both financially and structurally) = premium prices

[City Guy997S]

Originally Posted by FLCrescentBeach

Never buy any condominium/horizontal property regime (ex. only) in Florida.


Fees and restrictions will Kill YOU.

I have an uncle that made 100 million before he was 40 years old. He lives in a 5500 sq ft oceanfront condo despite being able to afford any type of dwelling. WHY? Simplicity: turn the key and walk away!

Nothing to do, enjoy your place and let other people worry about the insurance/maintenance/painting/landscaping etc. He owned a 14,000 sq ft estate on 6 acres for almost 2 decades, had lots of space he didn't use and the house always needed something. He would try to do a project a year just to keep the place updated. It was time consuming and the house cost him 100K a year to run (with no mortgage).

[FLCrescentBeach]

With respect^^^not a very good, comparable, normal and usual example of 99% of people who actually buy condominiums (or even single houses) in Florida (or any other USA city).


We would never ever characterize owning any condo these days, i.e. 2022 and BEYOND as representing or offering any modicum of "simplicity" . Now, it's quite the opposite given the plethora of regulations, fiscal issues, special assessments, "condo politics", fees, land-risk-weather factors, privacy issues, fire issues, and insurance complications/rates.


"Simplicity" ?? perhaps so, perhaps no. We say heck no. Living in a condo is not like living in a suite at the Four Seasons whereby you can simply check in, check out, and "walk away".

[Avalon08]

Originally Posted by Sunshine Rules

In light of the tragic Surfside condo collapse in 2021, the FL legislature created Senate Bill 4D in 2022 that was passed & signed into law by Gov DeSantis.

Under the new law condo buildings of 3 stories or more will have to follow new structural reserve requirements and have required, periodic structural inspections once the condo buildings have reached a specified age (30 yrs if away from the coast, 25 yrs if within 3 miles of a coastline) . The inspector will then provide the results in a report called a Structural Integrity Reserve Study (SIRS). The info provided in the SIRS will give condo boards guidance as to what will need repairs and when those repairs should be completed so that the boards may gather bids and information in order to calculate reserve budget requirements for those structural items.

As of Dec. 31, 2024, condo associations may no longer refuse to fund OR underfund the reserves for items required to be included in a SIRS. They will also not be able to use any of those itemized reserve funds for other purposes, such as to "borrow" from one reserve fund to use for another. SIRS items include things such as: roofs, load-bearing walls, foundations, plumbing, electrical systems, windows, waterproofing and exterior maintenance painting.

I can think of quite a few condo communities in our area that would now fall under the new reserve requirements.

Going forward, condo owners (and buyers of condos) need to become even more aware of the Reserves Budgets for their condo associations as underfunding of budgets in the past may mean much higher condo fees or special assessments into the future to bring their condo association reserves into compliance with the new state laws.


It is my understanding that the condo buildings must undergo the SIRS inspections every 10 years (unless the condo docs require more frequent inspections) and the associations must keep the records of the inspections for at least 15 years.


This may have a substantial financial impact on condo owners where the associations have waived the full funding of reserves in the past to keep down the monthly/quarterly condo fees.

Well, yet another reason I'm glad I'm in a one-story unit in our community, as opposed to the three-story elevator buildings across the parking lot. Also, that our reserves (aside from common area) are separated by individual "section", so each three-story building has its own reserve fund.

But as I said in another post, I don't know how the average condo buyer would be able to understand reserves and whether they're sufficiently funded. I was on the Board and could barely make sense of them.

[Avalon08]

Originally Posted by SanyBelle

I live in a condo in Miami, not ocean front. I'm on the board and we vote yearly to partially fund the reserves at 20-25%. I guess that's going to change!

Why would you do that??? I understand trying to keep fees down but eventually someone will have to pay the piper in the form of a huge assessment.

We (the entire community) vote to fully fund the reserves every year. But we do also vote to allow transferring of funds from one account to another in the event of a shortfall. Guess that won't be happening any more.

[1insider]

Originally Posted by Avalon08

Why would you do that??? I understand trying to keep fees down but eventually someone will have to pay the piper in the form of a huge assessment.

We (the entire community) vote to fully fund the reserves every year. But we do also vote to allow transferring of funds from one account to another in the event of a shortfall. Guess that won't be happening any more.

Do your reserves have a category for concrete repair? The new bill specifically addresses reserves for structural repair. Most associations with "fully-funded" reserves don't include concrete in that account. Your condo fees may very well have to be increased substantially in order to comply with the new mandatory addition to reserve accounts.

[City Guy997S]

Originally Posted by FLCrescentBeach

With respect^^^not a very good, comparable, normal and usual example of 99% of people who actually buy condominiums (or even single houses) in Florida (or any other USA city).


We would never ever characterize owning any condo these days, i.e. 2022 and BEYOND as representing or offering any modicum of "simplicity" . Now, it's quite the opposite given the plethora of regulations, fiscal issues, special assessments, "condo politics", fees, land-risk-weather factors, privacy issues, fire issues, and insurance complications/rates.


"Simplicity" ?? perhaps so, perhaps no. We say heck no. Living in a condo is not like living in a suite at the Four Seasons whereby you can simply check in, check out, and "walk away".

I'd disagree, I owned one for 5 years in Ormond by the Sea and was an absentee owner/showed up about 1 weekend a month. I never attended a single board meeting, I voted on a couple of things and would leave the place/shut the water off to the unit and come and go. It was a 400K unit so not quite Four Seasons but not Holiday Inn express either.

That being said, if I was buying another condo today I would want to see the finances/reserves and consider the long term costs that could be coming my way.

[FLCrescentBeach]

Originally Posted by City Guy997S

I'd disagree, I owned one for 5 years in Ormond by the Sea and was an absentee owner/showed up about 1 weekend a month. I never attended a single board meeting, I voted on a couple of things and would leave the place/shut the water off to the unit and come and go. It was a 400K unit so not quite Four Seasons but not Holiday Inn express either.

That being said, if I was buying another condo today I would want to see the finances/reserves and consider the long term costs that could be coming my way.

Frankly, those days (probably 25 years ago?) are LONG GONE...that's our point. Condos are atrociously poorly run and maintained - so are a lot of HOA's here in Florida. That's another reason not to touch a condo purchase in 2022 and beyond, but fools are aplenty, so are the gullible and inexperienced.