Stricter inspection requirements force owners to rethink investments and put units on the market
New safety regulations targeting condominium buildings in Florida are upending the state's real estate market, leading to an influx of condo listings and financial challenges for many property owners.
These regulations, introduced following the tragic Surfside condo collapse in 2021 that killed 98 people, aim to prevent future disasters but have placed significant burdens on condominium associations and owners.
The safety regulations, signed into law in 2022, require all condominiums three stories or taller to undergo milestone structural integrity inspections. The inspections, conducted by architects or engineers, must occur at 30 years for most buildings and at 25 years for those within three miles of a coastline. Subsequent inspections are mandated every 10 years. Associations must also complete studies on future repair costs and ensure reserve funds are in place by December 31, 2024.
Malcolm Fabre, president of the Summerhouse condominiums association in St. Augustine Beach, said concerns about the assessments are driving a surge in sales.
“I’ve had several people call me and say they’re doing that,” Fabre told local media News4JAX.
The financial strain stems from years of underfunded maintenance reserves. Bill Hughes, research director at the University of Florida’s Kelley A. Bergstrom Real Estate Center, noted that condo owners are now confronting years of deferred costs.
“They’re stuck in the middle,” he said, referring to the sudden need to budget for overdue repairs.
The Northeast Florida real estate market is feeling the effects. October saw a 118% year-over-year increase in condo listings, with many owners seeking to avoid impending financial obligations. Despite this surge in inventory, Northeast Florida Association of Realtors president Rory Dubin said the regulatory changes have pushed more condo owners to sell but he insists that demand remains healthy.
“Condos are still selling,” he said, though sales have slowed, and units are taking longer to sell.
The requirements also mandate that if significant structural deterioration is detected during initial inspections, a more invasive and expensive second inspection must be conducted. At Summerhouse, recent storm damage, including missing siding and roof issues, complicates the process.
“If we have a structural engineer come out, or these milestone study personnel, they’re going to see pieces of missing siding,” Fabre said. “They’re going to see roofs ripped off. There’s no way possible that we could pass it in that situation. But the state has done nothing about that.”
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The financial burdens are particularly acute for middle-income owners and those in older buildings. Condo associations must not only fund necessary repairs but also plan for long-term sustainability.
Fabre expressed frustration with the lack of exemptions for smaller complexes like Summerhouse or for storm-related damages. He also pointed out discrepancies in the law, which excludes hotels and apartment buildings from similar requirements.
“When you get groups together, they have a really hard time agreeing, particularly if what they’re having to agree upon is to make a substantial payment. If this was your individual home and you needed a new roof, then, then you would put a new roof on, particularly before or after it starts leaking, but, you would repair that roof and that cost would face you as a homeowner. When you’re in the condominium, you don’t see it as directly, because, you know, the roof’s not right over your head necessarily,” Fabre said.
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