Inside Floridas brewing condo crisis

A slow-motion crisis is unfolding in Florida’s condo market, threatening to upend the state’s image as a haven for retirees and reasonably priced beach living.Owners of the state’s older condos are bracing for steep special assessments, while racing to sell their homes and receiving only tepid buyer response.Amid a property market that’s still vibrant for nearly every other segment, Florida’s aging condominiums are losing value.

And nearly 1,400 buildings are now blacklisted from receiving mortgage financing, making those apartments an even-tougher sell.At the heart of this turmoil is a basic reality: Florida’s aging condo buildings desperately need repairs, and state officials are forcing them to assess (and pay for) those long-overdue upgrades. Under a law enacted after the tragic 2021 collapse of Champlain Towers South in Surfside, which saw 98 people lose their lives, condo boards may no longer defer major structural improvements to another day — or decade.The “Building Safety Act” required every condo tower in Florida aged 30 years or older to complete a structural integrity study by the end of 2024, to get a full grasp of what problems need fixing.  This year, the tab for those repairs comes due.

Condo boards must now set aside funds to fix the issues found in those studies — from concrete restoration to balcony overhauls.And the assessments on individual condo owners are looking both pricey and unsettling. “You’re going to see a massive reduction in the value of these buildings based on these giant special assessments and the work that has to be done,” said Orest Tomaselli, CEO of Strategic Inspections, which advises condo boards nationally on how to shore up their reserves. In Florida buildings he’s worked with, Tomaselli has seen special assessments as low as $250 per month, to a property that levied $2,500 per month, per unit owner, for a three-year stretch.“There are real people in these units that may be displaced,�...