South Florida condo owners are dumping their homes after getting slapped with six-figure special assessments
Maria Tkachun and her husband shelled out $490,000 for a seventh-floor apartment with a terrace and balcony boasting incredible views of South Florida’s Biscayne Bay in 2022.
The couple coughed up an additional $100,000 to renovate their unit in the Cricket Club condominium tower, installing extra-large format Italian porcelain tiles and adding a marble countertop and island to the kitchen.
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Two years later, the pair got hit with a six-figure special assessment — a charge that condo owners and homeowners in HOA communities must pay to either finance a renovation on the property or to replenish an underfunded reserve.
“This is just outrageous,” Tkachun told The Wall Street Journal (WSJ).
Florida condo associations are hiking fees to meet safety standards
Following the 2021 Surfside condo collapse — which killed 98 people due to construction flaws — Florida is requiring stricter safety standards and more frequent inspections, while many condo associations are raising fees to build a larger reserve for repairs.
The Cricket Club’s condo board recently proposed a nearly $30 million special assessment for repairs, like roof replacement and facade waterproofing — coming to more than $134,000 per unit owner.
Some owners, like Ivan Rodriguez, who liquidated his 401(k) retirement account to buy a unit for $190,000 in 2019, can’t afford the extra fees, so they’re putting up their condos for sale instead.
The WSJ reported condo inventory for sale in South Florida has more than doubled since the first quarter of 2023, to more than 18,000 units today, due to either rising insurance costs or repair fees for older buildings that aren’t passing inspections.
“I think this is just the beginning,” Greg Main-Baillie, an executive managing director at real estate firm Colliers, told the WSJ.
But sellers are finding few takers. Rodriguez originally listed his unit for $350,000, but was forced to keep marking it down until finally it sold for $110,000 in April — 42% less than what he paid for it.
Fort Myers real estate agent Claudia Springgay told NBC2 she’s also seen 1,000 more condos on the market this May compared to last year, pointing to higher association fees that have “increased somewhere between 20% and 25% on average.”
“People have become very nervous about the fact they’re buying a condo and getting hit with another assessment, and there are pending assessments, and sometimes they go to the new buyer,” added another Fort Myers agent, Sue Christiano.
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How you can avoid getting sprung with a large special assessment
Many older condo buildings in Florida have gotten away with waiving reserve funding for years — until new laws led them to ramp up fees for unit owners to ensure these buildings can adequately cover the costs of maintenance and repairs.
Tkachun said the first red flag was when banks refused to give her and her husband a mortgage for the condo unless they made a 25% down payment since the building had no reserves.
It’s important to consider whether your HOA’s reserve fund is equipped to cover repairs and maintenance or unexpected expenses before you purchase the property.
You can also try to file a complaint with your board when you receive a special assessment — if you have support from other homeowners in your building or community. However, this typically only works if you can prove the assessment is too high or isn’t funding a project that is necessary for health and safety reasons (like adding a pool, for example).
At the Cricket Club, residents say the special assessments have created resentment among unit owners who are willing to shell out the funds and move on and those who can’t afford the costs and are forced to sell. Some folks are gathering documentation to try and find evidence the fees should be lower.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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