If you’re considering a condo purchase or have lived in your condo for years, you have a right to know if the proper inspections are being done to ensure the safety of your building.
What questions should owners ask their condominium associations regarding condo inspections and safety?
Start by Asking the Board for the Name of the Condo Inspection Company and Individual Inspector
Once you know who conducted the inspection, you’ll want to get detailed answers to these specific questions:
- Were the inspections conducted by an engineer, architect, or a general contractor?
- Did each of these professionals sign off on an inspection report?
- Did they conduct a thorough on-site inspection of the property? If yes, how long ago?
- What are their qualifications?
- Are the company and the inspector insured? If so, what are the limits of the policy?
- What limitations are included in their inspection report? Are there limits of liability?
- Do they exclude the inspection of certain aspects of the property?
Furthermore, Unit owners should ask for a copy of the inspection report as well as the report referenced in Florida Statute 718.301(4)(p). (Note: We believe this statutorily required report should be a part of the condominium documents all buyers are required to receive when they buy a unit because it is provided under seal by an architect or engineer attesting to the required maintenance, useful life, and replacement costs of, among other things, the roof, structure, fireproofing and fire protection systems, elevators, plumbing, electrical systems, swimming pool or spa and equipment, seawalls, and pavement and parking areas.)
Ask the Condo Board Why They Chose the Inspector
How can a condominium board of men and women without structural engineering degrees evaluate the work that goes into a proper condo inspection and safety report and determine the right company for the job? The answer, of course, is that they can’t.
Boards should seek advice from their legal counsel and discuss these issues with their insurance carrier. Ask your condo board if they sought legal counsel during the selection process and how they reached the decision to hire the company that handled the inspection.
How Do Associations Pay for Expensive Improvements?
Homeowners Associations (HOA) will typically borrow money from a bank to pay for any large maintenance expenditures that arise. For instance, if the roof needs replacement, the association may take out a loan for the repair and then assess each unit owner their pro rata share of the cost of the improvement (of course, this assumes there isn’t a fully funded reserve account for this improvement).
Unfortunately, assessments can hit condominium owners unexpectedly, causing them to owe hundreds, even thousands of dollars in fees they weren’t anticipating. The inspection report from can help you better understand why the improvement is necessary and if the assessment is in line with the project’s cost.
What Should You Do if You Can’t Afford Your HOA Repair Assessment?
For those unit owners who can’t afford to pay, the association will likely spread the payments over time, up to 10 years in some cases.
If you still can’t afford to pay the assessment, then you can either obtain a mortgage/equity line or sell your unit.
Should Condos Have Rainy-day Accounts for Assessments? And Should Owners Maintain Their Own Personal Accounts for the Inevitable Assessments?
Yes, and yes. According to Florida Statute 718.112(2)(f), condominium associations must collect reserve amounts for any replacement or deferred maintenance costs, including roof replacement, exterior painting, pavement resurfacing, and others, regardless of the cost, and for any item for which the replacement or deferred maintenance cost would exceed $10,000.
Condo boards are legally obligated to prepare an annual budget that includes a reserve for these items. However, the law also says, “This subsection does not apply to an adopted budget in which the members of an association have determined, by majority vote at a duly called meeting of the association, to provide no reserves or less reserves than required by this subsection.”
We recommend that condominium associations set aside funds for the long-term maintenance and repair of common areas or for capital expenditures to help reduce the reliance on special assessments.
Condominium owners should go into their purchase knowing that assessment are not a matter of if but of when. We highly recommend maintaining a personal reserve for the unexpected assessments that will eventually arise.
In Terms of Safety, is it Better to Live on a High Floor or a Low Floor? Have Any Studies Been Done on This?
Our firm cannot offer an expert opinion to answer these questions. However, we believe risks exist in both scenarios. Ground floor condos are more prone to flooding and water damage, and perhaps even issues related to crime. Floors towards the top of the building take longer to escape in an emergency like a building fire. They can also face wind issues. Again, we are not experts here.
After the Condo Collapse in Surfside, Will Mortgages and Insurance be More Difficult to Obtain?
We believe so. We anticipate that banks will have a heightened level of scrutiny when underwriting these loans. Lenders will likely ask more questions and require additional documentation, especially those purchases involving FHA financing.
To obtain an FHA loan, a condominium must receive FHA approval. Some of the requirements for approval include having adequate insurance and adequate reserves.
Should Associations with Older Buildings, or Any Buildings, Rethink their Assessment Reserves?
One of the most common complaints we hear from condo owners during an assessment is that their association’s assessment reserves are not fully funded. We also hear stories of assessment funds held in reserve being used for purposes other than those for which they’re intended.
Even before the Surfside condo collapse, most associations could have benefitted from increasing their assessment reserves. Our recommendation to every Florida condominium association is to reassess their reserves to ensure they’re fully funded.
Will it be More Difficult to Find Concrete Repair Firms Now?
Perhaps. However, we believe that the Surfside condo collapse was more complicated than simply a structural issue related to inadequate concrete repair.
With that said, there’s little doubt that the cost of having a firm perform these repairs will skyrocket based on the level of data and certifications that will likely be needed for boards and governmental agencies to perform this work. The high demand for building materials and the lack of skilled workers given the tight labor market will also make it harder to find concrete repair firms in Florida that can do the work that’s needed here and across the state.
If you’re under contract to buy a condominium in Florida, then be sure to ask for copies of the inspection reports related to any improvement assessments that are pending and those that are already certified, confirmed, and ratified.
Before you purchase a condo in Florida, consult with an experienced Florida real estate attorney about condo inspections and safety. Most Florida real estate lawyers, like Larry Tolchinsky, will offer a free initial consultation (over the phone or in-person) to answer your questions. When you’re ready to speak with a real estate lawyer about your case, contact Larry or give him a call at 945-458-8655.