Is blowing up Florida condo associations the only solution to preventing condo collapses?
The tragic collapse of the Champlain Towers South condo in Surfside in June 2021 was a defining moment for Florida. Ninety-eight lives were lost, and the devastation rippled across communities throughout the nation. A few days following the collapse, I …
The tragic collapse of the Champlain Towers South condo in Surfside in June 2021 was a defining moment for Florida. Ninety-eight lives were lost, and the devastation rippled across communities throughout the nation.
A few days following the collapse, I visited the site with my young son and Sen. Jason Pizzo, who had been tirelessly meeting with families and coordinating with the state since the collapse. We stood together outside the security perimeter, looking at the makeshift memorial that had been set up along a chain-link fence — a poignant reminder of the lives cut short and the gravity of what had occurred.
Image via Jeff Brandes, Florida Policy Project.
That visit was a sobering experience for both of us. It underscored the urgent need for action to prevent such tragedies. With this in mind, I fully support the need for stricter regulations and transparency to ensure the safety of Florida's condominium buildings. However, as we approach the Dec. 31 deadline for the first round of inspections mandated by SB 4-D and SB 154, we must reassess our approach.
SB 4-D, passed in May 2022, and SB 154, passed during the 2023 Session, were responses to the Champlain Towers collapse. It mandates that all Florida condos over 30 years old and taller than three stories undergo milestone inspections by Dec. 31, 2024. If significant structural issues are found, further inspections and prompt repairs are required, or the building could be deemed unsafe.
While well-intentioned, this legislation has created new challenges.
This new law also abolished a portion of the statute that was partly responsible for this problem because it had permitted Florida's condominiums to continually defer needed improvements to their buildings if they voted that they couldn't afford to make them.
Without regard to that history, SB 4-D and SB 154 mandated sweeping new inspections with no feasible way to pay for those inspections, to say nothing of the needed repairs that these inspections identified. Whatever our feelings may be about decisions not to provide for building safety, we must acknowledge that those decisions were permitted and guided by Florida law for years — until they were not.
This has led to where we are now. Many buildings simply cannot assess their way out of this problem that — in part — was created by previous laws and often years of deferred maintenance that the new law now disallows.
The demand for inspections is immense, but the supply of qualified professionals is limited. This bottleneck has placed condo associations in a precarious position, forced to comply with a law that may bankrupt them. The costs of these inspections and subsequent repairs identified in them are solely the responsibility of the condo owners, many of whom are seniors on fixed incomes, making it impossible for them to keep up with.
The real estate market is already feeling the impact. In the second quarter of 2024, there were over 20,000 condo listings in Palm Beach, Broward and Miami-Dade counties — nearly 90% in buildings over 30 years old. This glut of properties, often sold under duress, will lead to a dramatic drop in prices and a significant reduction in willing buyers. Banks are becoming increasingly hesitant to lend for these properties, further destabilizing the market.
Moreover, insurers are less inclined to offer coverage for older buildings, especially those with structural deficiencies. This lack of insurance options compounds the problem, making it even more difficult for condo associations to secure the necessary funds for repairs or even maintain basic operational insurance.
Recent condo buyers are likely to be the most impacted by these developments. Unlike legacy owners who deferred repairs and benefited from lower fees, these buyers now face severe financial challenges. The sudden need for expensive repairs or the potential devaluation of their properties could leave them underwater on their mortgages and facing foreclosure. Worse, they may be forced to sell at a loss or, in extreme cases, face displacement if their buildings are deemed unsafe.
Despite the negative impact, there will also be positive outcomes for developers and future buyers. Developers may acquire and rehabilitate distressed properties, revitalizing communities and upgrading housing stock. Future buyers will benefit from increased transparency and disclosure requirements, ensuring that the structural integrity and financial health of buildings are more thoroughly scrutinized and maintained. This shift towards greater oversight will ultimately lead to a safer and more stable real estate market.
However, uncertainty remains about how these requirements will play out in practice. No one knows how many condos will be affected, the scope of the assessments, or the broader impacts on the market. The Legislature would be wise to maximize its options, acknowledging that the effects of this law are already reverberating through the market. This uncertainty calls for a cautious and flexible approach, ensuring that the law's implementation mitigates the negative impacts wherever reasonable.
Additionally, the Department of Business and Professional Regulation (DBPR), which oversees the enforcement of these regulations, is likely overwhelmed by the volume of issues arising among condo associations. The DBPR needs more resources to address these challenges effectively.
Given these dynamics, the best course of action may be to stay the course but with eyes wide open. Transparency and mitigation must be central to our approach. The Legislature should host a Special Session to delay penalties for one year and conduct a deep dive during the session in March. We must balance the need for safety with the time required to evaluate the law in light of evolving circumstances.
The memory of those lost at Champlain Towers should drive us to make Florida's buildings safer, but it should also remind us of the importance of preserving the communities that call these buildings home. By keeping condo owners and the public fully informed and making necessary adjustments, we can protect both the physical safety and financial well-being of condo owners while navigating these challenges more effectively, without blowing up Florida condo associations.
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Jeff Brandes is the President of the Florida Policy Project and a former Senator.
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