Tales from the Florida condo crisis: Homeowners describe hardships after cost hikes

Yahoo

02-03-2025

Many Florida condo owners are angry about cost increases they didn't expect and how those increases are eroding their buying power.
Many are frustrated by decisions of their management companies and governing boards, and want proof that their funds are being spent correctly.
More than 75 condo unit owners conveyed two emotions — anger and frustration — to the South Florida Sun Sentinel, which in early February asked the public to describe how they were being affected by rising condo maintenance costs.
Some owners are angry that monthly maintenance fees have doubled in recent years, thanks to increases in insurance costs and new laws enacted after the Surfside tower collapse in 2021 requiring condo associations to fully fund their reserves.
Relief could come soon, however, as legislators debate bills aimed at easing the burden in the upcoming legislative session that begins March 4.
One proposal, by Sen. Rosalind Osgood, a Democrat representing central Broward County, and Rep. Mitch Rosenwald, a Democrat representing eastern Broward in the House, would provide one-time $2,500 grants to help low-income senior condo owners facing assessments to fund their condominiums' reserves.
Another bill, filed by Osgood without a House companion, would exempt condo buildings with five or fewer stories from requirements to conduct structural integrity reserve studies and allow them to waive or reduce reserve requirements to fully fund reserves.
Currently buildings three stories and higher must undergo the study and fully fund their reserves. And those requirements, which took effect Jan. 1 for most condo buildings, have hit condo owners in the wallet.
Many of the owners who responded said the increases were forcing them to consider relocating. Some have already noticed that more units in their complexes are being offered for sale. But moving is easier said than done when buildings need safety improvements that cost more than owners are able to pay.
'Seems like everyone is in the same boat here,' said Henry Marcus, owner of a unit in Manor Grove Townhomes in Wilton Manors, about the financial difficulties many unit owners are facing. 'It's tragic, really. So many older folks had to put their units on the market. Florida is no longer for retirees or the middle class.'
But selling isn't always easy, as untold unit owners are learning.
Dawn Munera, a Pembroke Pines condo owner who also is a real estate broker, said that mortgage guarantor Fannie Mae refuses to back loans in complexes with reserve shortfalls. Those condos require all-cash buyers, or creative and unconventional lenders.
Here are four stories detailing hardship being felt by some South Florida condo owners, based on emails and interviews with the Sun Sentinel:
Doris Gustafson has never wanted to leave the home she bought in The Reflections community on Pine Island Drive in Davie back in 2008.
'It's a lovely community with really neat townhomes,' she said. 'They're not boxy little icky-looking things. I came in and instantly fell in love. Inside is full of angles and vaulted ceilings. They're really quite nice.'
But a near doubling of the monthly maintenance fees within the community in recent years — from $380 to $635, she says — has hit the 75-year-old retiree hard because she depends solely on Social Security for her income. And inflation-triggered increases in her benefit haven't kept up with rising costs of food, medicine and transportation in addition to the maintenance fee hike.
'I'm going to have a CT angiogram this month (February) and my copay is $150 for that,' she said recently. 'Well that kind of blows my budget out of the water for this month.'
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Like others in similar situations, Gustafson said she has considered selling her home and moving elsewhere in the region.
'Even if I could find a home in Delray Beach, and buy something for cash with the profit I would make on my house, then the condo fees would be higher and I'd be in the same boat. They could go up at any time. And you're stuck. I mean, do I move out of state? Away from my doctors? Away from my friends?'
She has decided to take in a roommate to help cover costs. Sharing her unit will require her to move her artwork and supplies out of the upstairs bedroom she had been using as a studio.
The thought of bringing in a tenant 'terrifies me,' she said. 'Having a stranger living with me is creepy, to put it mildly. I can't have an old lady up there because the stairs are steep. So I would probably need a younger person. I'm near Nova Southeastern University. A doctorate student who would be studying all the time would be nice.'
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She said she sometimes feels guilty for complaining about her situation. 'I know there are other people who are in much more difficult circumstances than I am,' she says. 'But I'm 75 years old. I bought my house. I planned my life. And this is not supposed to be it — over 300 stupid dollars.'
The first special assessment notice that Graham Brunk received for concrete restoration work at The Lakeshore Club condo building in West Palm Beach was for close to $9,000, he said, adding that unit owners were told that the painting and restoration company agreed to do the work for about $700,000.
Brunk, 37, understood. He knew the six-story, 80-unit building was approaching 50 years old and the collapse of the Champlain Towers South in Surfside was still on everyone's minds.
It wasn't difficult for unit owners to notice issues that needed to be addressed. 'Standing on my balcony, I saw a lot of chips and cracks in the concrete,' he said. While engineering studies provided to unit owners did not identify anything in immediate danger of collapse, 'there were definitely things that were very crucial that needed addressing sooner rather than later.'
As work got underway, the company removed two sets of floor-to-ceiling sliding glass doors from Brunk's unit and replaced them with temporary barriers to keep the weather out, Brunk said.
Initially, the company thought it would only have to remove sliding doors from a handful of units, he said. 'But once they started — they worked on the building from north to south — they found a lot more units that needed this kind of work done.'
Suddenly, the job price had increased from $700,000 to $1 million, he said. 'And then from $1 million to $1.3 million.'
Then the additional assessment notices started to arrive. 'So my $9,000 turned into another $4,000 assessment. And another $4,000 assessment. And another $4,000 assessment. Every time it was like, 'This is the last one.''
Although Brunk's weather barrier was installed around April, work at his unit, which required removal of the weather barrier, didn't commence until July, he said. Brunk soon realized, 'I really should not have been there' while the work was underway.
Dust piled up inside of his unit and he had to move all of his furniture 5 feet away from the opening. 'It's not that big of a condo to begin with, so it was difficult to walk around the unit. There was no sunlight, so it was pretty depressing to be at home. Just the experience of having to live through it was traumatizing to me.'
The final cost of the project ended up at about $2.5 million, and his share totaled $27,654, Brunk said.
He was able to cover the first $18,800 out of his savings. The last $9,000 was charged to a credit card that he said offered 0% interest on cash advances for 12 months.
'I've been fortunate that I could pay for this, but I wonder about my neighbors,' he said.
Twenty-four hours after Nayara Silva listed her condo at Cypress Bend 2 in Pompano Beach for sale, she got an offer for her full asking price, she said.
But then the lender told her late last year that it couldn't finance a loan for her buyer, she said, because 20% of unit owners in her building were more than 60 days delinquent on special assessment payments.
The delinquencies made the building ineligible for funding by mortgage loan underwriters Fannie Mae and Freddie Mac, 'regardless of down payment,' the loan officer told her in an email obtained by the Sun Sentinel. He added, 'Sorry for the bad news.'
Silva, 33, said that when she purchased the condo unit in January 2020, the monthly maintenance fee was just $350 and included cable, water, security and property maintenance.
By 2024, those fees had swollen to $916 'because of the 40-year inspection requirement and (rising) insurance,' she said.
During the five years she lived in the unit, she had invested $50,000 in upgrades and remodeling.
After getting married, Silva and her husband decided to look for another home that wouldn't require such high monthly maintenance fees. They found a townhome in Deerfield Beach and made an offer. Then, five days before their would-be buyer was scheduled to close on Silva's condo unit at the end of last year, they got the bad news from their lender that the unit was ineligible for its financing.
Florida condominiums currently occupy 1,398, or 28.6%, of about 3,900 properties on Fannie Mae's blacklist, said Jake Marcus, partner in the Braintree, Massachusetts, office of condo firm Allcock Marcus, which has obtained a copy of the list that's supposed to be available only to lenders and condo associations. That's nearly double the 763 Florida condos on the list that totaled 2,306 properties in November 2023, the firm said.
Issues that can land associations on the list include inadequate reserves or insurance, too many delinquencies, too much commercial space, structural or construction issues, outstanding special assessments and too many rentals.
Marcus said that Silva's condominium is on the do-not-lend list, but the cited reason is 'critical repairs (needed) or deferred maintenance.'
When reached by email and phone, a woman who answered the phone at the property manager's office acknowledged receiving an email from the Sun Sentinel seeking clarification for why Silva's buyer was turned down for a loan. 'I'm not going to discuss any of that with you,' she said.
Silva said the couple decided to rent out the condo unit but are only breaking even because of the assessments and monthly fees.
She's hoping that outstanding issues can be corrected 'so we can sell the property and get back what we invested.'
Twenty-five years ago, Tony Ferrari, now 63, was working as a computer repairman on Long Island in New York. His life changed forever on the day he was asked to retrieve a monitor from a high shelf.
'You remember, they were big and heavy in those days,' he said. He was 'twisted' atop the ladder when he lifted the monitor above his head, herniated 'a bunch of disks,' and almost fell to the floor, he said.
The mishap was followed by back surgery, 'a small Worker's Compensation settlement,' seven years of physical therapy, and a move to Florida. Eight years ago, he purchased a small condo in Greentree Villas in Boynton Beach and now struggles to make ends meet on a monthly Social Security Disability check.
'I've been on disability for quite a few years now,' he said. 'It started out with very low costs, but now my $1,500 monthly check is consumed by just the condo fee right off the bat, (costing) almost $600. So you have electric and food and your car insurance and just regular basic things — nothing extravagant — and it eats up my check easily.'
Getting by was a lot easier, he said, when his monthly maintenance cost was only $230. After a series of annual increases, he says that monthly bill is now $580. In 2023, he was charged a $1,523 assessment to cover an insurance shortfall, according to a document Ferrari shared with the Sun Sentinel.
This year he expects his association to send out another assessment asking owners to pay $10,000 to $15,000 to replace their roofs.
Ferrari hopes to avoid that by selling his unit and finding a new place to live, possibly in a nearby mobile home park where he'll still have access to his familiar neighborhood, friends and doctors.
He says he'd prefer to stay where he is. 'I like my place, I have a nice villa, one-car garage. It's nothing amazing. It suits me, but it's just way too expensive.'
While he knows mobile home park fees can increase as well, he figures he can buy a mobile home for about half of what he can get by selling his condo and bank the rest.
'I'm hoping that, you know, I can settle down and be happy and just enjoy where I live as I get older and older. But, you know, there's got to be someplace else.'
Ron Hurtibise covers business and consumer issues for the South Florida Sun Sentinel. He can be reached by phone at 954-356-4071 or by email at [e-mail].