Tim Johnson has owned his condo in Miami Beach for nine years. It’s about 900 square feet and has a balcony facing west.
"I have beautiful sunsets and I have a view of the Miami skyline," he said.
The building has 225 units. It was built in 1968. Johnson owns his unit outright. He does not have a mortgage.
But he spends $1,200 a month on assessments. And that's before his own insurance and property taxes.
Johnson's monthly fees are not extraordinary in South Florida. Condominium associations are facing a reckoning of sorts. Their members are having to cough up money to make emergency fixes and begin socking away cash for regular maintenance. Both of these bitter financial pills come as a result of reforms passed and signed into law after the Champlain Towers South building in Surfside collapsed three years ago, killing 98 people.
Condo building associations in Florida have not historically set aside much money for regular maintenance projects.
The new regulations are forcing associations to "catch up to other places that historically have put more money aside for reserves," said David Diestel, CEO of First Service Residential, a big property management company based in South Florida.
"Everybody in the conversation would agree it is the right thing to do. It's just difficult to change immediately — saving, investing in the deferred maintenance — for the long term health," he said.
Condo buildings throughout the state that are at least three stories tall and 30 years old must conduct a milestone inspection by Dec. 31. It requires an engineer to make a structure inspection of the building.
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Condos in Miami-Dade and Broward older than 40 years old have been subject to a recertification inspection for many years. The results of a milestone inspection may require a building to take fast-action without having the financial reserves.
Miami-Dade condo buildings put aside significantly less money than those in cities such as Boston, Washington, D.C. and Los Angeles. Just nine cents of every dollar of a high-rise condo association’s budget in Miami-Dade goes toward reserves, according to a survey by FirstService Residential of the buildings it manages. The average in the U.S. and Canada is 15 cents of every dollar.
The reform law also requires associations to begin building their savings accounts for regular maintenance such as plumbing and electrical systems, roofs and fire safety. Associations need to start budgeting for those items and putting aside money beginning next year.
That requirement will add to already high monthly fees for many condo owners.
"We found that HOA fees are up more than 15 % from last year in Tampa and Fort Lauderdale," said Redfin Chief Economist Daryl Fairweather.
She pointed to the reforms passed in the wake of the Surfside collapse and the "rising costs of living, rising insurance costs, rising maintenance costs. All that makes HOAs more expensive," she said.
It adds up fast. The median monthly condo fee jumped 15% in Florida, more than twice the national increase. Condo owners in South Florida are paying an average of between $600 to $800 a month for monthly assessments.
Johnson's $1,200 in monthly fees for his Miami Beach condo is made up of two parts. The regular fee is $884, which he said was increased 26% this year. He also pays $315 a month for a special assessment. And he will continue to pay that for the next 15 years. It goes toward a $10 million project his condo association board approved about a year and a half ago. He thinks a portion of it goes toward building up the building's budget reserves.
"Since I've owned this apartment, there has been a special assessment almost the entire time, of one kind or another," he said.
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