The cost of condo living is on the rise, partly because many South Florida condo associations are scrambling to meet new state requirements passed after part of the Champlain Towers South building collapsed in Surfside.
"It's on the equivalent of Hurricane Andrew in 1992," said Peter Zalewski, who runs the condo data and analytics website Condo Vultures.
Zalewski said the tragedy was a tipping point.
"Up until the collapse of the tower and the following legislation, many associations opted to simply kick the can down the road, not pay for what was necessary, not put money in reserves," Zalewski said. "Now, the legislation is forcing money to go into reserves and forcing money to be spent on what it should have been spent on a long time ago, so there's a real catch up that's occurring."
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SURFSIDE CONDO COLLAPSE
He looked at the cost of monthly maintenance fees per square foot for three randomly selected buildings along the South Florida coast: one in Surfside, one in Miami Beach and one in downtown Miami.
"If you look from 2020 to 2022, you're going to see a double-digit increase, as high as 80%," he said. "The reason why it's gone up is primarily insurance costs."
"The Surfside tragedy has led to a very tight condo insurance market, especially for master condo associations," said Mark Friedlander of the Insurance Information Institute.
Friedlander said there are fewer companies writing policies for condo associations now, compared to two years ago. He also said many associations are having to buy policies from more than one insurer in order to get full coverage for their structure.
"Based on the trends we are seeing, master condo associations now are paying two to five times the rate for coverage that they were paying two years ago before the Surfside tragedy," Friedlander said.
Those higher insurance costs, coupled with the added expenses related to condo reform are fueling the cost of living in a condo for now.
"There's a deadline that's been imposed by the state legislature and this is what everybody is dealing with," Zalewski said. "Five, ten years from now it will all be under control but right now there's a surge ... As a result of that, costs are going to go up. Special assessments are definitely coming."
If you live in a condo building in Miami-Dade County and you are facing a special assessment associated with repairs due to recertification, you may qualify for help. The Condominium Special Assessment program offers certain condo owners who meet income requirements a 0% interest loan of up to $50,000 to help cover those costs. A spokesperson told NBC6 Responds the county has already committed $2.8 million to 132 households, with an average loan amount of just under $21,000.
The spokesperson said there are still plenty of funds available. You can read more about the program here.
