Miami Condo Owners Get Relief for Tower Repair Assessments

Miami is providing relief to condo owners who are being hit will large assessments to cover the costs of ongoing renovations to improve the structural integrity of beachfront condo towers throughout the city.

Dozens of aging condo towers in Miami are undergoing renovations to comply with a law passed after the Champlain Towers South collapsed in Surfside in 2021, killing 98 people.

Concrete is being restored and foundations are being reinforced in order to meet new structural integrity standard for beachfront condo towers.

The renovations cost millions; loans taken out to pay for the repairs are being repaid by condo owners who are being hit with assessments of  thousands of dollars by condo associations representing their share of the building upgrade.

Last year, Florida enacted new legislation that requires condos to pass milestone structural inspections and to fully fund their reserves. These special assessments, which are impacting thousands of buildings on the Florida coast, can exceed $100K per unit.

Under a new Miami-Dade County program, condo owners can qualify for interest free loans with terms of 40 years. For example, a $23K loan would by paid off in monthly payments of about $48 for 40 years, according to a report in the Wall Street Journal.

The new standard for structural integrity coincides with a wave of aging buildings in Miami coming due for deadlines to recertify their structural integrity under existing law, which requires the recertification after the building has been standing for 40 years.

Developers are targeting hundreds of aging condo apartment buildings in Miami Beach for acquisition so they can tear them down and build new luxury residential towers, zeroing in on towers approaching a 40-year deadline to recertify structural integrity.

Florida law requires that 80 percent of condo unit owners agree to a sale before a condo building can change hands, often forcing developers to go through a tedious process known as condo termination, effectively negotiating the purchase of each unit with its owner.

The requirement in South Florida that buildings older than 40 years must be recertified for structural integrity is creating a reckoning of sorts for the existing inventory of beachfront apartment buildings in the area, a majority of which date back to the 1970s or earlier.

The collapse in Surfside of one of two beachfront Champlain Towers, which were erected in 1981 and found to be in need of significant structural repairs, drew attention to a 2020 Florida International Survey of the coast which reported that much of the ground under Miami Beach is slowly sinking.

According to WSJ, hundreds of apartment buildings, representing more than two-thirds of the inventory in the Miami area, are either approaching or more than 40 years old.

Repair costs to retrofit aging condo towers, which must be assessed and then paid by the unit owners, can exceed by far the building’s overall value as well as the ability—or willingness—of condo owners to pay these costs. Failure to make needed repairs can set off a domino effect of assessment defaults, budget shortfalls or building code violations for unfinished repairs.

The best-case scenario for developers who want to buy a condo building is for all of the condo unit owners to agree to sell as a group. Prior to 2007, 100% agreement to sell was required by Florida law. In 2007, Florida enacted a condominium termination statute that reduced the threshold of agreement by unit owners needed to sell the building to 80 percent.