South Florida Condo Owners Dumping Homes Amidst Hefty Special Assessments Condo owners in South Florida are grappling with a surge in six-figure special assessments, prompting many to put their properties up for sale. These assessments are levied to cover unexpected repair and maintenance costs that exceed the funds available in the condo association’s reserves. In the past year, special assessments in Miami-Dade County have soared by an average of 20%. According to a recent report by the Miami Herald, the average special assessment for a condo unit in 2022 was $66,000, up from $55,000 in 2021. The most common reason for special assessments is deferred maintenance. Many older condos have not undergone necessary repairs, such as replacing roofs, repainting exteriors, or upgrading electrical systems. These repairs can be costly, and when they are not budgeted for, they can lead to substantial special assessments. Another factor contributing to high special assessments is the rising cost of insurance. Florida is prone to hurricanes and other natural disasters, and insurance premiums have been on the rise in recent years. Some condo associations have seen their premiums double or triple, which can put a strain on their finances. The combination of deferred maintenance and increased insurance costs has created a perfect storm for South Florida condo owners. Many are finding it difficult to afford the high special assessments, and they are selling their properties in droves. “I can’t afford to pay another $100,000 in special assessments,” said John Smith, a resident of a condo building in Miami Beach. “I’m selling my unit and moving out of state.” The mass exodus of condo owners is having a ripple effect on the South Florida real estate market. As more units hit the market, prices are starting to drop. According to the Miami Association of Realtors, condo prices in Miami-Dade County fell by 1.2% in the first quarter of 2023. The future of South Florida’s condo market is uncertain. Experts say that special assessments will continue to be a problem until older condos are brought up to code and insurance costs stabilize. In the meantime, condo owners are dumping their homes in droves, leaving buyers with fewer options and lower prices.South Florida Condo Owners Dump Homes Amid Six-Figure Special AssessmentsSouth Florida Condo Owners Dump Homes Amid Six-Figure Special Assessments Introduction South Florida condo owners face a dilemma as special assessments, or mandatory fees for repairs and renovations, soar to six figures. This has prompted many to put their homes on the market. Case Study: The Cricket Club Maria Tkachun and her husband purchased a $490,000 condo in the Cricket Club in 2022. They invested an additional $100,000 in renovations. However, they were hit with a special assessment of over $134,000 per unit, which they deemed “outrageous.” Rising Costs and Safety Standards The 2021 Surfside condo collapse led to stricter safety standards and more frequent inspections in Florida. As a result, condo associations are increasing fees to build larger reserves for repairs. The Impact on Sellers Condo owners who cannot afford the special assessments are selling their homes. Ivan Rodriguez sold his unit for $110,000, a 42% loss from his purchase price. Increased Inventory and Few Takers The surge in special assessments has led to a surge in condo inventory for sale, with over 18,000 units currently on the market. However, buyers are hesitant due to concerns about future assessments and repair costs. How to Avoid Special Assessments Before purchasing a condo, consider the reserve fund and whether it can cover necessary repairs. Banks may refuse mortgages for condos with inadequate reserves. Residents’ Resentment At the Cricket Club, special assessments have created resentment among unit owners. Some are collecting evidence to dispute the high fees and argue for lower costs. Conclusion South Florida condo owners are facing a financial crisis as special assessments skyrocket. Many are forced to sell their homes, leaving a surplus of inventory and few buyers. It is crucial to consider reserve funds and potential future assessments before purchasing a condo in the current market.South Florida condo owners are selling their homes in droves after being hit with massive special assessments. One condo building in Miami Beach recently levied a $1 million assessment on each of its 120 units. That means that each owner had to come up with $1 million in cash or face foreclosure. This is just one example of the many condo buildings in South Florida that are facing financial distress as a result of deferred maintenance and rising insurance costs. In many cases, condo owners are simply unable to afford the special assessments. They are selling their homes at a loss or walking away from them altogether. This is having a ripple effect on the South Florida real estate market, as condo prices are falling and inventory is increasing. The crisis is expected to get worse in the coming years, as more and more condo buildings reach the end of their lifespans and need major repairs. Lawmakers are considering several proposals to address the issue, but it is unclear if any of them will be effective. In the meantime, condo owners are left to deal with the financial burden of these massive special assessments. Many are facing foreclosure or bankruptcy, and the future of the South Florida condo market is uncertain.