New condo laws are forcing South Florida residents to sell their homes — here’s the big requirement and why ‘nobody is happy'
South Florida commonly attracts homeowners who want glorious beach views and warm weather. But new state laws require condos to have sufficient cash reserves to cover any major repairs and conduct inspections on buildings three stories or higher — which is forcing more condo owners to sell their homes.
That's what's happening to the owners of Springbrook Gardens, an 18-unit, 1940s-era Fort Lauderdale building. Residents were forced to leave the building last September due to a crumbling foundation. But now, the building's owners are being forced to sell, as they can’t afford to fix it.
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It's a terrible situation, according to resident and condo owner Warren Sackler.
“We didn’t have $4.5 million to take care of [it],” he told CBS News Miami. “Nobody is happy about it. Of the 18 people, they all would love to live here, but not with the debt and everything else.”
An impossible situation
The $4.5 million required to address the issues with Springbrook Gardens' foundation is a bill the 18 residents can't afford, as it would amount to hundreds of thousands of dollars per person. So instead of moving forward with repairs, the building residents have agreed to sell instead and not come back.
It's a problem that isn't just impacting Springbrook Gardens. New Florida laws are making condo living increasingly expensive and are forcing many owners out.
Florida realtor Jeff Chenore has been in the real estate business for 30 years and says the situation is reaching a breaking point.
"We're constantly getting phone calls from owners asking 'What should I do, what can I do, how should I approach this?'" he told CBS News Miami.
The owners of Springbrook Gardens were offered $14 million for the building, but that number falls short for the residents. Once the building sells, it will likely be taken down to make room for a new condo building. But its owners have to hope that it sells for a high enough price so that they can move on and find comparable housing elsewhere.
All told, though, Florida's new rules have a lot of condo owners spooked. As Chenore said, "There's a lot of condominiums that are currently for sale, and a lot of them just simply can't sell."
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When repairs and regulations become cost-prohibitive
Following the Champlain Towers condo collapse of 2021 in Surfside that killed 98 people, Florida condo laws have changed in an effort to prevent a similar tragedy. At the state level, any three-story, 30-year-old building (or 25-year-old building if it's near saltwater) needed to be inspected for structural integrity by the end of 2024. A follow-up inspection is required every 10 years thereafter.
According to GD&C Law, the cash reserves that are now required also need to be able to cover the estimated replacement cost of the following items:
Roofing
Loading bearing walls
Floors
Foundations
Fireproofing/fire protection
Electrical systems
Waterproofing and painting
Windows
Plumbing
The problem is that condo owners are being charged special assessment fees to cover these cash reserve requirements — and many can't afford them.
Compounding the problem is that insurance costs for condos are on the rise in Florida.
The average cost of a commercial condo association policy to cover common fixtures like roofing and irrigation systems had, as of September 2024, more than doubled over the past two years, according to Insurance NewsNet’s coverage of data from the Florida Office of Insurance Regulation. These increases are being passed along to condo owners who can't afford to keep up.
Not surprisingly, condo listings are up across the state of Florida. According to Florida Realtors, as of November 2024, new listings of condos and townhouses rose by 5.5% year-over-year. And there's a chance that trend will continue as more and more condo residents inevitably get priced out of ownership.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
