Wow! Florida Condo Assessments are Crushing Owners

RetiredHappy said:
We don't share a wall with another home and we have 3 HOAs and would not want to live in another home without HOA again. Before we moved to the current single family home, we lived in a high end concrete single level condo penthouse unit in the same resort community, and we also had to pay into 3 HOAs. Even with that, we were very glad to have to pay into the HOAs. HOAs are not always bad, as in our case, an excellent setup. Our 3 HOAs cover 1) the resort community lake and general area, 2) the guard gated community in which our home resides and 3) sub-development.
Click to expand...
I'm confused you live in a SFH, but you pay into 3 HOA's? I mean congrats if you own 3 homes in retirement, but it sounds like you own one home in a community with an HOA. What are the other two if you don't mind me asking?
 
ncbill said:
Type of construction also matters.

High-rise concrete towers with flat roofs in a maritime environment will always have more maintenance needs than my conventional stick-built townhouse with brick siding & a peaked roof using standard asphalt shingles.
Click to expand...
Our former condo were all one or two-story buildings, so most of the new rules put in place don't apply. While the association was underreserved, but part of the reason was because we had just put on new roofs in 2022 which drained reserves. However, the level of reserve assessments were sufficient to get to full reserving within a decade so they should be in good shape if they stay the course.
 
Flyfish1 said:
I'm confused you live in a SFH, but you pay into 3 HOA's? I mean congrats if you own 3 homes in retirement, but it sounds like you own one home in a community with an HOA. What are the other two if you don't mind me asking?
Click to expand...
It's not unusual to have multiple HOAs or condo associations for a single property. One for your specific building(s) and another master association for the community that covers ammenities like pools, clubhouses, etc.
 
This is my experience on the Treasure Coast, Florida (East Coast). I purchased a condo in 9/2020 with HOA of $290 / month. Sold it in 05/2024 with HOA of $540. And this is BEFORE this condo will be hit with SIRS (Structural Integrity Reserve Study) and Milestone Inspection as part of Florida SB-4D law (as one highlighted). The condo was a 3-story CBS / flat roof built in 1976 and 3 miles (flying) to the ocean. It was well maintained, but it's inevitable after all those years and the SB-4D law that HOA will increase again (probably dramatically) in 2025. Most of the HOA increases (before the SB-4D law will come into effect in 01/2025) are due to condo insurance (common elements) increases; this was highlighted by Property Manager in a meeting. I totally understand the benefit of the SB-4B law, but I find it too coarse. IMHO, one cannot (structurally) compare a 50-story condo on the beach with a 3-story condo 3 miles from the beach, still as of today, AFAIK, the law will be the same for both buildings; which I think is un-fair.
Before this condo, I was living on a 4-story condo 500ft from the beach and yes with the ocean salt, spalling was quite pronounced. There is no spalling (other than normal wear and tear) 2-3 miles from the ocean. This 3-story condo had balcony concrete slabs redone in 2023 (after 47 years), and spalling was minimal. The 4-story condo had balcony concrete slabs redone in 2018 (after 35 years more or less), and spalling was extensive. This is just a real world comparison of structural damages that occurs on Florida condos based on their ocean proximity.
Going back to the $ part, in the 3-story condo, lot's of fixed income people won't be able to afford the HOA increases so either leave (to AL, LA, GA, etc...) or foreclose the condo. The Property Manager felt lot's of foreclosure will be coming (similar to 2008).
 
Last edited:
surfFL said:
... Going back to the $ part, in the 3-story condo, lot's of fixed income people won't be able to afford the HOA increases so either leave (to AL, LA, GA, etc...) or foreclose the condo. The Property Manager felt lot's of foreclosure will be coming (similar to 2008).
Click to expand...
That is the hard part. The increasing cost of maintenance and periodic replacements are difficult for some people on fixed incomes. If they are in a SFH they can just ignore it and run the place into the ground, but that option isn't available in a condo. Also, it isn't unheard of that property tax incrases over many years make a house unaffordable for those on fixed incomes so they need to sell and move and the same thing happens in condos.

The unfortunate reality is that the condo association needs to do what is best for the owners as a whole and that may result in some owners being priced out and having to sell because they can't afford to continue to live there. But it could happen if they rent an apartment or own a SFH too.
 
The Florida Homestead act protects property owners from unaffordable tax bills by limiting annual increases. It also makes it more difficult to sell, although it does have some portability.

An HOA that has not built an adequate reserve, however, and now is forced to perform maintenance, cannot escape the need to both pay the repairs and build the reserve.
 
I've heard this from a close friend who lives up in Indian River County. Another close friend who owned a condo in Naples pulled the plug and sold out in 2019 at peak price. Seems like Florida is attracting dumb money now. Not a state where I would ever go to anymore. I left at age 18 and never looked back.
 
Another reason to stay away from condos unless you know the details of the HOA budget, spending, accruals, etc. I was thinking we might end up in a condo one day when we couldn’t handle our house, but probably not a good idea. If our HOA mismanages our pool/clubhouse and common area will decline and we’ll all see it. A condo HOA has far greater maintenance responsibilities, for more expensive items, many that homeowners can’t readily see. Interesting article. I am intimately aware of where maintenance stands on our house.

Our HOA fees have gone up modestly every year. $220/qtr in 2019, $290/qtr in 2024 - about 6.4% APR, guess it’s a good sign? They do communicate well with homeowners regarding maintenance and capital projects.
 
Last edited:
It seems to me that part of the problem is that people couldn't really afford the condos when they bought them. I suspect that some folks believed that having a condo, instead of SFH, meant no maintenance to worry about. However, it only means that individuals don't have to worry about dealing with each specific maintenance item. In the end, someone still needs to pay for the ongoing maintenance and that has to be the owners. Entropy and the second law of thermodynamics doesn't care if it is a SFH or a condo unit, as decay will always occur.
 
Last edited:
W2R said:
Maybe there will be a rush to rural locations in sparsely populated states with low insurance rates. Or, maybe there are other solutions that I haven't thought of.
Click to expand...
Interesting that you made that comment. We have seen that happening in our rural area in the past few years. Property values have ~ doubled as a result. A couple of real-estate developers have come in and bought up sections of land, subdivided them into 3 to 5 acre tracts, put in basic improvements (water, electricity and rural roads) and are selling them like hotcakes. "So far" it hasn't created any noticeable problems in our community but as the number of people increase, I'm sure it will. (There goes the neighborhood :))

One of these subdivisions sold out seemingly overnight but nobody has moved in. Rumors are that it was bought up by someone as a real-estate speculation investment.
 
Last edited:
My HOA recently decided to raise the monthly dues, first raise in six years. Our development is 25 years old, so the maintenance is becoming more expensive regardless of the big inflation increases in everything (especially insurance).

Some of our owners argued for a special assessment instead of a dues increase, thinking that lower dues would make it easier to sell. But they were finally convinced when it was pointed out that in order to maintain a healthy reserve the assessment would have to be huge. It's just easier to find an extra $100 in your monthly budget than it would be to pony up big bucks that would be largely based on guesswork.
 
jazz4cash said:
I was looking at a condo for investment but a realtor told me the HOA would only divulge if they met requirements for FHA financing. No other details from their books would be available until after an offer was made. That seems to be a flaw in the sales process.
Click to expand...
That would be a deal-breaker for me unless the offer could be rescinded after reviewing the books. I think many associations like to keep the monthly fees low to make the owners and the prospective buyers happy but then when there's a major maintenance issue they have to do an assessment. As Brett said.. you can pay me now or you can pay me later.
 
Flyfish1 said:
I'm confused you live in a SFH, but you pay into 3 HOA's? I mean congrats if you own 3 homes in retirement, but it sounds like you own one home in a community with an HOA. What are the other two if you don't mind me asking?
Click to expand...
Yes, we live in 1 SFH, and have 3 HOA fees. There are no common amenities, no community pools etc. Master HOA pays for maintenance and water for the privately owned 320 acre manmade lake/reservoir and general landscape for the community. One HOA covers our guard gated sub-community which pays for the 24x7 guards, general landscape etc. One HOA covers our sub-development that has a monument at our entry and landscape stuff. They don't cover anything for our SFH. We still have to pay for our own yard service, utilities, etc. Our HOA fees are about $7K per year.

There are 2 different Sports and Social memberships which are separate from the HOAs. There is a country club membership which includes golf at a private club which is also an option. The country club membership has an initiation fee to join and another $16K a year in dues.
 
Last edited:
My work partners and I sold our office building and 1031'd into 3 Florida rental condos in 2004. One was in a high rise built in the 1970's on the beach in Siesta Key. I suspect the HOA fees on that one are getting out of control. Luckily we sold all 3 about 5 years ago.
 
I own a condo and am on the board. Our dues go up 5% a year. The 2 buildings have 75 condos each and are 47 years old. We are having to replace many of the central boilers that provide heat, AC and hot water to the buildings.

The upside is that these items are included in our dues and aren’t paid by the owners. We have a healthy reserve but also big expenses in the future.
 
FlaGator said:
Correct. But even 10 miles from the coast as I was in SoFla, the humidity is so high things start to rust in <30 days. Now I'm 1 mile from the water, and anodized aluminum is corroding. Imagine what a 30 year old concrete structure just a few hundred yards from the beach is experiencing.
Click to expand...

Where did you move to?
 
FWIW, the problem is not the dues. The dues are a symptom. The problem is high expenses. Reduce expenses (without endangering the property condition) and the dues can be reduced. Good luck doing that.
 
Last edited:
I'll be making a motion soon to increase our HOA fees and have the HOA take over wood destroying organism prevention and treatment. Currently, owners are responsible but an infestation is a threat to the overall building and ultimately all owners so ensuring prompt remediation is important and some techniques (tenting) require coordination or compulsion to accomplish and it's been an issue. Most owners are passive and those that show up and vote are pretty pragmatic so mine isn't bad. I'd like to not be on the board but it's a small community and no one wants to do it... I can't get fired. 🤷‍♂️

If SFH homeowners had to account for depreciation and deferred maintenance most would also likely be underfunded... it's just more visible for HOAs.
 
Mark1 said:
It seems to me that part of the problem is that people couldn't really afford the condos when they bought them. I suspect that some folks believed that having a condo, instead of SFH, meant no maintenance to worry about. However, it only means that individuals don't have to worry about dealing with each specific maintenance item. In the end, someone still needs to pay for the ongoing maintenance and that has to be the owners. Entropy and the second law of thermodynamics doesn't care if it is a SFH or a condo unit, as decay will always occur.
Click to expand...
That's not really fair, many may have bought in decades ago, and could certainly afford what they were presented as reasonable expectations by sellers, realtors, and their research at the time.

"Your building has a risk of actually collapsing so we've changed the code and now you have to pay for major structural repairs or die in it" - I would highly doubt many condo owners saw that one coming.

Many (millions of) people, particularly retirees, downsized from SFHs to much smaller condos so they could afford to live somewhere warm, in a place that matched their SS/pension budgets.

But when your HOA dues quadruple, most people can't handle that.
 
One fundamental problem is that most board members get zero training, don't know what they don't know, and are not willing to learn.
 
I'm sharing my math as of why I sold the condo and purchased a SFH
Condo (no Wind)House (w/ Wind)
ConstructionCBSCBS
Roof typeFlatHip
Roof20042024
AC20142024
WH20202024
Windows (Impact)20212024
Living10141314
Lot (sf)110050007100 with County land
Price$93,000.00$305,000.00
Price / sf$91.72$232.12
Bedroom23
Bathroom1.52
Homeowner Insurance$42.00$76.08
Electricity$80.00$90.00$130 w/ EV
Garbage$0.00$11.00
Water$0.00$40.00
Landscaping$0.00$0.00DIY
Termite Prevention + Traitement$0.00$0.00DIY
Pest Control + Traitement$0.00$0.00DIY
Septic Tank Inspection + Treatment (2 years)$0.00$33.33
Septic Tank Annual Operating Permit for ATU (2 years)$0.00$6.25
HOA (2024)$540.00$0.00
RET (Est. 2025)$55.00$233.33
TOTAL$717.00$490.00$227.00

For me, the monthly SFH monthly cost saving is an important part of my (discretionary) budget ($227), and again this is before the SB-4D law going into effect in 01/2025 on the condo.

Couple of notes:
1/ Condo did not have wind insurance coverage (SFH has it).
2/ RET is estimated for 2025 as homestead and based on discussion with Property Appraiser w/ portability, etc... It should be pretty accurate
3/ Electricity is low (+$40 to $50 for EV home charging) compared to neighbors with same SFH because I have the AC set at 79F during the day and 78F at night, my neighbors have much bigger bills (almost 2x). Also have an efficient washer and drying combo (vs 2 machines for neighbors) and I set the WH temp to the lowest (probably around 105F)
4/ The total $ I spent on the house is $337k, much higher than $305k (house price) because mainly of
a/ Closing costs $5k
b/ Landscaping $4k (I did most of it myself though)
c/ Well + Pump + Irrigation $6.8k
d/ Upgrades + Gardening tools + misc items
5/ I completely understand the additional responsibility of the SFH vs condo, however I found it rewarding to be able to care after my own garden (72 plants were planted, including 27 DIY). I have all the time in the world to do it and the Florida heat does not bother me. Also I'd just discovered 2 days ago that this is an excellent workout: I use Athlytic on the Apple Watch and set it to 'Outdoor Walk' when I'm in the garden; it did amazed me how much calories I burnt and max heart rate! Very healthy exercise!
6/ I did not account for house maintenance in the chart above - mainly because the house is new - this will be part of my discretionary budget and hopefully very low.
7/ I have saved already for an AC replacement and Roof replacement
8/ Termite is just for the roof / trusses (house studs are aluminum, not wood)
 
I'm a trustee on our Jersey shore Condominium HOA board. We spend a lot of time reviewing our financials with the management company and tracking our reserve fund and deferred fund. We make sure that we meet or exceed our reserve fund recommendations from our engineering study. The biggest unanticipated expense was a huge increase in Insurance cost last year, that was partly due to ineptitude by the broker we used at the time (since replaced). We just reviewed our annual audit with our CPA firm and the audited financials are available to all residents and prospective buyers. We are told that by many outsiders (including the CPA firm that does hundreds of HOA's) that we are one of the most fiscally sound HOAs in NJ. Yes, it hurts when we have to raise maintenance fees or do a special assessment for Insurance (as we did last year) but it is appreciated by the majority of owners who have seen the value and marketability of our property improve year after year. I wouldn't serve on a board that tried to short-cut its financial obligations to keep owners happy.
 
The recent legislation passed in Florida represents a significant step forward in addressing longstanding issues within condo associations. While the initial headline might suggest widespread alarm, it's important to clarify that condos with adequate reserves in place were not mandated to increase them further. However, many associations have historically deferred necessary maintenance and neglected crucial reserve studies, essentially postponing inevitable expenses.

The heartbreaking collapse of the building serves as a stark reminder of the consequences of inadequate management and oversight by these associations. Sadly, this mismanagement now affects those left behind, underscoring the critical need for proactive maintenance and sufficient reserve funding. Residents who lived in these condos for decades may have enjoyed lower fees, but this often meant insufficient contributions towards long-term upkeep.

These legislative changes seek to level the playing field, ensuring that all condo associations prioritize essential maintenance and financial planning. For prospective buyers, particularly seasonal residents, this presents an opportunity to make informed purchases. With clearer insights into maintenance costs and property values, there are potentially advantageous deals available.

It's crucial for condo owners to conduct thorough due diligence regarding their association's financial health, including reserve adequacy and compliance with maintenance standards. Neglecting to do so could lead to unforeseen financial burdens down the road. While it's unfortunate that legislative action and tragic events prompted these reforms, the goal is to prevent future disasters and enhance the overall safety and stability of condo communities.
 
You must log in or register to reply here.

Latest posts

Back
Top Bottom