After Surfside: What Should You Know about your Condo?

The whole nation has been shaken up by the recent disaster in Surfside.  All eyes are on us and our hearts go out to the victims and their families as well as to everyone involved in the rescue efforts.

The truth is that this tragic event cannot happen in vain and there needs to be a lot of changes at all levels: local ordinances, building code, re-certification procedures, condo management and reporting ….the list is endless.  Pointing fingers in one single direction would be a disservice to the families and the pain they are feeling and in my opinion, we need to learn from mistakes made and make a change so this never happens again.

South Florida Building Code

Unfortunately, it takes a major tragedy to effect change.  The last major changes to the South Florida Building Code happened after Hurricane Andrew.  The Washington Post reports that many experts expect The Champlain Tower Collapse to lead to more changes:

Hurricane Andrew forced a reckoning that led to Florida establishing some of the toughest storm-specific building codes in the United States, if not the world. Now, in the wake of a deadly condo tower collapse in Surfside, Fla., on June 24, experts who lived through the aftermath of Andrew expect similar changes to follow.

Here’s my take on the building code.  Architects & Engineers are supposed to design structures with the building code in mind (as a minimum).  Contractors/Builders have to abide by that “minimum code” and our protection is the permitting process and inspections performed by local municipalities and the county.  The consumer’s protection is that permitting process – so it’s not just about changing a building code, it’s making sure that inspections are thorough and not completed by fly-by-night, part-time inspectors.  This means that we should stop complaining when builders do not pass inspections!!!  <<< please read that again.

We should NOT complain to the city when builders don’t pass inspections << that’s our only protection from shifty builders that cut corners!!

Safety Standards – 40-yr recertifications

A lot of people didn’t even know what a 40-yr recertification was until now.  All of a sudden, there’s a surge of requests for 40-yr inspection report findings.  The problem is:  who is the keeper of this information?  Where can a home owner or an interested buyer go to find this information?  Is it as easy as asking your condo association?

A 40-yr Safety and Recertification Inspection is a structural and electrical inspection that is required for all 40-year-old buildings in Miami-Dade and Broward Counties (and every 10 years thereafter). These buildings must be recertified by a registered Florida Engineer or Architect for safety. The purpose of the inspection is to minimize structural and electrical failures and be better prepared for hurricane-force winds. The inspection also helps owners plan for future repairs and renovations.

So back to who is the holder of the info.  There needs to be a state mandate that makes condo information easily accessible to both owners and prospective buyers.  Here’s where change needs to happen ASAP.  There are hundreds of buildings in South Florida without management companies or with non-responsive ones.  This information needs to be easily accessible to the public and not just “passed 40-yr recertification”, but fully available reports.

It’s also my opinion that the 40-yr mark should be shortened, especially in areas close to the ocean and knowing how salt affects construction and maintenance.

Condo Management and Association Boards

Let’s start by saying what a thankless job it is to volunteer for a Condo Board.  Think about it, everyone assumes that condo boards all have ulterior motives and everyone is making money on the side.  Of course there are the occasional crooks that get “elected” onto boards, but the reality is that most boards are comprised of those home owners that care about their building and want to make sure things run smoothly and their best interests are protected. 

Here’s where it gets tricky.  When funds and budgets are limited, boards have very little power and sometimes deferred maintenance issues turn into massive problems.  Owners never want special assessments, nor do they want monthly HOA fees to increase – it’s a vicious circle.  And then attorneys suggest suing association for mismanagement which leads to even less money going into building maintenance and into attorney pockets.

Who exactly regulates condo boards?  The Division of Florida Condominiums, Timeshares, and Mobile Homes of The Department of Business and Professional Regulations.  But to read about responsibilities, decision making, duties, and governing doc updating, take a look at this long article by The State of Florida Property Management Association.

Condo Management Companies have as much power as is granted to them by their prospective boards and I can tell you from years of experience, that most smaller buildings don’t want to spend a lot of money on management.  Again, vicious circle ruled by low condo budgets.

The answer is not easy but I’d love to see more regulation by the state that forces transparency of condo associations: from easily accessible condo docs, financials, board minutes, reserves, as well as necessary safety inspections.

Condo Insurance

And lastly, more regulation, better management, better maintenance and stricter parameters of condos will ultimately lead to higher insurance costs that are already prohibitive.

The bottom line is that we are about to see many necessary changes in South Florida.  In an article by Florida Realtors, this question was posed and I completely agree with Ken Johnson’s assessment:

I’m wondering if enough owners will now start selling their high-rise condo units that the values of these units will drop significantly. At the same time, will the prices of semi-attached condos, or low-rise units increase significantly? I can see a number of owners moving to what they will now perceive as ‘safer’ housing. I can also see a number of snowbirds deciding to sell before prices drop, then renting for the season or buying a winter home in low-rise or garden-style units.” – Arthur Missan

Answer: Ken Johnson, a real estate economist at Florida Atlantic University, said he does not anticipate significant effects on prices because of the Surfside collapse. He said buyers likely will perceive the collapse as a freak accident that’s unlikely to be repeated.

“I expect to see an increase in the demand for satisfactory property inspections contingent upon closing,” he said. “However, I do not see any price impact due to this horrible tragedy. Most know that this sort of thing is unlikely to ever happen again. As for a moving strategy, I don’t really see one with the average cost of a move, all things considered, being between 10% and 20% of selling price.”

Access of Information

As REALTORS and intermediaries of sales and rental transactions we depend on information given to us by home owners.  I cannot mention the amount of times that owners don’t know anything about their buildings and it’s like pulling teeth to contact condo boards and management companies on their behalf.  Transparency and Regulation of condo information is key to protect all parties and this is where the state and local municipalities need to step in.

If it’s difficult enough to request condo estoppel letters from some associations, imagine what It’s like to get safety inspection findings?  

It is our responsiblity to learn from this trategy and improve every aspect of condo living in South Florida and beyond.