Amid closer scrutiny, will condo owners foot the bill?
Collapse jolts US cities to ramp up inspections
Three years ago, Florida lawyer Eric Glazer offered a dire warning: The state’s condo buildings faced an “absolutely avoidable” crisis stemming from years of willfully neglected maintenance combined with lax government oversight.
Writing on his blog “Condo Craze and HOAs,” Glazer warned that building after building lacked the savings to fund increasingly common repairs. He understood, he wrote, why it’s hard to get condo and homeowners associations to set aside money for maintenance, especially for retirees on limited incomes.
Still, he said, hoping that cracking concrete and leaky roofs would fix themselves was gambling with property and lives.
“So many people, especially seniors, are rolling the dice thinking that none of these repairs will be necessary while they own the property. That may
be true for now, but eventually, everyone rolls a 7,” Glazer predicted. “I see buildings getting older and unavoidable repairs coming on strong. I also see hurricane seasons becoming active with the potential to cause catastrophic results to our communities.”
In the wake of the Surfside condo collapse June 24, which caused 90 confirmed deaths, Glazer takes no pleasure in his prediction being right.
Though investigators have not determined a cause, owners of Champlain Towers South were told in 2018 of structural issues with cracking concrete – then argued for years about paying for repairs.
That tragedy has jolted some local governments into deploying building inspectors and condo associations into hiring engineers to look for damage, a USA TODAY Network survey of communities along the Atlantic and Gulf coasts found. Others are discussing options while waiting for more information.
Even those that take action face a challenge in pushing condo associations to foot the bill for more inspections and the repairs they may uncover, experts cautioned.
Compounding risks ignored
A largely hands-off, low-tax approach helped Florida’s economy boom during the late 1970s and early 1980s as retirees flocked south from more expensive states.
That led, some experts said, to widespread complacency by governments and the HOA and condo boards responsible for maintaining the buildings.
In Florida, government building inspectors typically set foot in a condo building only before it’s occupied.
Condo associations routinely waive a state requirement requiring them to set aside money for repair costs.
Only a few jurisdictions in Florida, including Miami-Dade County, require inspections of tall buildings, and the 12story Champlain Towers South was in the midst of the county’s 40-year recertification process when it collapsed.
Money that might have gone toward educating HOA and condo associations about their legal responsibilities has routinely been diverted by the Florida Legislature, a USA TODAY Network investigation found. Lawmakers siphoned off $65 million funded through condo association fees since 2008, nearly 40% of the $167 million raised during that time.
Unlike single-family homes where the owner is solely responsible for a property, condo owners bear responsibility for the interior of their units and pay monthly maintenance fees to share the costs of upkeep for the building, its
grounds and common areas. That can mean elected boards must persuade their neighbors to pay more, so the association can build reserves sufficient to cover the costs of major repairs.
Under Florida law, condo associations are supposed to set aside money each year so they can afford to replace, for instance, the roof at the end of a 20year lifespan.
The law also allows associations to skip that step if they wish.
The Surfside collapse demonstrated the potential consequences.
In that case, an engineer hired by the condo association in 2018 warned of concrete deterioration that could “expand exponentially” if repairs weren’t made.
The condo association faced a bill of more than $16 million and had barely more than $700,000 in reserves. Residents agreed to impose assessments ranging from $80,190 to $150,330 per unit to cover the costs.
“It’s your neighbors, retired school teachers, former accountants, working people,” said Jim Emory, a licensed public engineer with more than 30 years of experience in Florida. “You’ve got condo board members thinking to themselves, ‘I know that Mary in Unit 3 can’t afford it.’ Maybe the board members themselves can’t afford it.”
Emory is the president of Cocoa Beach-based Keystone Engineering and Consulting, which provides condo building inspections and manages maintenance projects.
Since the Surfside collapse, his firm fields as many inquiries a day from condo boards as it used to handle in a month.
Emory said he and his staff are essentially tripping over government building inspectors, a needed change.
“They are out looking for anything that’s even remotely a safety concern. Because none of them wants to end up on TV like in Surfside,” he said. “I don’t know how aggressive they’re going to get, but changes are coming, and it’s definitely for the better.”
Varying responses to collapse
In Volusia County, home to Daytona Beach, the county chair said council members had been inundated with emails. “The public is demanding something be done,” said Jeff Brower, adding that he plans to bring the matter up at the council’s July 20 meeting.
“We’ve got structures on the beachside that have been there 40 years, and the salt air is just destructive. I think we’d be remiss not to take this warning from South Florida,” Brower said. “I want to be known as the safe place to come and vacation.”
Brower proposed requiring an inspection 10 years after construction, with its results determining how often future inspections are required. He said the costs should be paid by condo associations and hoteliers, not taxpayers.
“I know it’s an extra cost,” he said. “… But what is a human life worth?”
In Palm Beach County, Boca Raton Councilman Andy Thomson said the oversight that comes with an inspection program would help keep residents safe, given that boards are often reluctant to assess owners for maintenance.
“The condos should really be doing that themselves,” he said, “but condo boards are notorious for not necessarily moving quickly, so having that kind of process that we’re contemplating really draws the line and says, ‘Look, we understand you all have had plenty of time to do this, but this is really the deadline, and you need to do this now.’”
Other communities are taking more of a wait-and-see approach. Officials in West Palm Beach, Sarasota, Bay County and Panama City all said they are considering how to proceed.
Not just Florida
In Alabama, Gulf Shores officials have long conducted inspections of tall buildings every three years.
They expanded the program to all rental properties regardless of height eight years ago after a wooden deck collapsed on a condo rental. Because Gulf Shores sees so many hurricanes, city officials said, they routinely inspect buildings for storm damage, which also gives them a chance to uncover more serious issues.
“We feel very confident and comfortable in our ability to understand what’s happening with these buildings and make sure our properties are safe,” Gulf Shores city spokesman Grant Brown said.
Orange Beach, Alabama, has left decisions on inspections up to condo associations, but city officials are now considering whether to mandate them in the wake of Surfside. “Has it created discussion? Absolutely,” said City Administrator Ken Grimes. “I don’t think it’s just coastal communities. Anyone with high-rise buildings (is) talking about the what-ifs.”
Officials in Hilton Head, South Carolina, are contacting building owners and recommending that they schedule regular inspections.
New Jersey is another state that doesn’t require inspections after buildings are occupied, but Edgewater Borough Administrator Greg Franz said the Surfside collapse has prompted new conversations about high-rises on the Hudson River and state’s “Gold Coast.”
“The heart of the matter is, a lot of it has to do with the condo and co-op boards,” Franz added. “Are they willing to authorize the extensive work that is sometimes required in some of these older buildings?”
That was the question at the City Place in Edgewater, a condo undergoing four-year, $8 million repairs launched when inspectors found steel reinforcing bars inside concrete walls had began rusting, weakening the structure.
The work began two years ago, said Jim Tracy, chairman of the condo board. But instead of being grateful the inspection found flaws before they could get worse, “people wanted to recall me and they wanted a new board of directors. They didn’t want to hear the truth.”
Ultimately, the people who own the buildings are responsible for upkeep, experts said. More inspections might help nudge them to do the right thing, they say, and stricter requirements for reserves can help make sure condos can afford inevitable repairs.
Glazer, the prescient condo attorney, is predicting change for the industry.
“Everybody’s certainly nervous now because we now know this can happen. That really has stirred the pot, really gotten a lot of board members nervous,” Glazer said. “My phone is ringing off the hook from boards that are now wanting to do the right thing. I can only tell them that what they’re doing is so dangerous, it’s playing Russian roulette by not putting money away for repairs.”