Maria Tkachun and her husband spent $490,000 on a seventh-floor apartment with a terrace and balcony with incredible views of South Florida’s Biscayne Bay in 2022.
The couple raised an additional $100,000 to renovate their unit in the Cricket Club condominium tower, installing extra-large Italian porcelain tiles and adding a marble countertop and kitchen island.
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Two years later, the pair was hit with a six-figure special assessment — a fee that condo owners and homeowners in HOA communities must pay to finance a renovation on the property or replenish an unfunded reserve.
“This is just outrageous,” Tkachun told The Wall Street Journal (WSJ).
Florida condo associations are raising fees to meet safety standards
After the 2021 Surfside apartment collapse — which killed 98 people due to construction defects — Florida is calling for stricter safety standards and more frequent inspections, while many condo associations are raising fees to build a larger reserve. for repairs.
The Cricket Club apartments board recently proposed a special assessment of nearly $30 million for repairs such as roof replacement and facade waterproofing — totaling more than $134,000 per unit owner.
Some landlords, like Ivan Rodriguez, who liquidated his 401(k) retirement account to buy a unit for $190,000 in 2019, can’t afford the extra fees, so they’re putting the apartments up instead. theirs for sale.
The WSJ reported that the inventory of homes for sale in South Florida has doubled since the first quarter of 2023, to more than 18,000 units today, due to rising insurance costs or repair fees for older buildings that fail inspections. .
“I think this is just the beginning,” Greg Main-Baillie, an executive director at real estate firm Colliers, told the WSJ.
But sellers are finding few buyers. Rodriguez originally listed his unit for $350,000, but was forced to keep marking it down until it finally sold for $110,000 in April — 42% less than he paid for it.
Fort Myers real estate agent Claudia Springgay told NBC2 she’s also seen 1,000 more apartments on the market this May than last year, pointing to the association’s top rates being “up somewhere between 20 % and 25% on average”.
“People have gotten very nervous that they’re buying a condo and getting hit with another appraisal, and there are pending appraisals, and sometimes they go to the new buyer,” added another Fort Myers agent, Sue Christiano.
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How you can avoid growing up with a large separate assessment
Many of Florida’s older apartment buildings have gotten away with draining reserve funds for years — until new laws prompted them to raise fees for unit owners to ensure these buildings can adequately cover the costs of maintenance and repairs.
Tkachun said the first red flag was when the banks refused to give her and her husband a mortgage on the apartment unless they made a 25% down payment because the building had no reserves.
It is important to consider whether the HOA’s reserve fund is equipped to cover repairs and maintenance or unexpected expenses before purchasing the property.
You can also try to file a complaint with your board when you receive a special assessment — if you have support from other homeowners in your building or community. However, this usually only works if you can prove the assessment is too high or doesn’t fund a project that is necessary for health and safety reasons (like adding a swimming pool, for example).
At the Cricket Club, residents say the special assessments have created resentment among unit owners who are willing to fork over the funds and move on, and those who can’t afford the costs and are forced to sell. Some people are gathering documentation to try to find evidence that rates should be lower.
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This article provides information only and should not be construed as advice. Offered without warranty of any kind.