Florida condos and HOA’s are in a state of disarray, and the issues facing both may take longer to fix than you think.
Longtime readers know about the new laws and policies that took effect this past January. They were meant to make Florida condos homeowner associations more accountable and transparent. It stemmed from the collapse of the Surfside condo collapse in 2021.
On January 1st, Florida condos had to have 1) Structure Integrity Reserve Study (SIRS) complete, 2) Their Milestone Report and 3) their reserves fully funded. You can read about these in great detail on this Florida Senate page.
So far this year, completing the sale for Florida condos has been messy: HOA’s don’t have the documents needed, many have yet to get their building inspected, others have slapped enormous special assessments to their owners… it’s been a mess.
In addition, the Florida “As-Is” Sales and Purchase Agreement Condominium Rider is one page longer. And it’s filled with boxes to check, or not, showing what’s been done, who pays for what and more. Look:
Florida Condos and Their Mandates
Yesterday, new policies went into effect. They call it “Condo 4.0.” Here are the main points for you to know:
* The buyer review period when buying Florida condos extends from 3 to 7 days
* Changes the way Florida condos can finance large reserve requirements
* Adds finance documents to the year-end financials a buyer is entitled to review
* Associations with 25 units or more must have a website – down from 150 units. These associations must post digital copies of the documents listed above
* These website must include: condo declaration, bylaws, articles of incorporation, association rules, annual and proposed budgets, monthly income expense statements, certification of directors, meeting notes and agendas, milestone inspections and SIRS, and building permits
As for more transparency, these websites must have:
* All approved BOD meeting minutes over the preceding 12 months
* Associations can fund reserves related to structural integrity with assessments and special assessments with a line of credit or a loan. Information on this must be included on the associations annual financial statement. This must be on their website and be disclosed to all potential buyers.
Transparency is KEY for Florida Condos & Their Associations
Bottom line: the years of non-disclosure are over. Buyers need to know everything about Florida condos via their associations before, or while, they’re in the purchasing process.
The next process that needs disruption is the HOA/COA approval process. A buyer must complete an HOA Application when buying a condo (same for townhomes). This is to check the buyer’s background, perhaps an income verification, an interview with the BOD, and more.
It’s industry knowledge that the HOA application “can take up to 30 days.” That’s ridiculous. HOA’s hire property management companies to do most of the day-to-day work. These folks are compensated. But HOA board of directors are normally volunteers.
Regardless, it shouldn’t take “up to 30 days” to perform work that should, and could, be completed in, say… 72 hours.
I’m sure this is a part of buying Florida condos that will be disrupted next. Sounds like a disruption I’d enjoy taking head on. I’ll keep you posted.
(Main Photo: A luxury Florida home on the intracoastal lined with palm trees)
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** South Florida Real Estate Inventory is ABOVE 2019***
Last week’s supply was 62,029
Today’s supply is 61,889
Supply was DOWN 140 Units last week
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*** Supply is DOWN 4 weeks in a row ***
