Recent Law
In 2022, Governor DeSantis signed Senate Bill 4D whose aim was to reform the system following a tragic condo collapse in the Miami suburb of Surfside in 2021 that killed more than 90 people.
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The law now requires any building over three stories and 30 years old to have a mandatory assessment done to ensure they won’t be the cause of another disaster. Buildings that fall into this category represent around two-thirds of all condos in Florida, with assessment fees being due by December 31 of this year.
Giving Rise to a Boom
Following the Surfside collapse incident, Florida saw a new condo boom as old buildings were torn down to make way for new condominiums.
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Developer Ian Bruch Eichner has called it “the most significant impact on waterfront real estate that you’ve ever seen in your professional lifetime.”
Developers Taking Advantage
This new condo market landscape allowed some actors to take advantage of the situation to force condo owners into selling who may not be able to afford the new upcoming special assessment fees.
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“You may have those that are on a fixed income that are retired and they may not be able to,” said Miami attorney Robert Pelier. “Some developers, either ethically or unscrupulously, may seek to take advantage of that financial landscape.”
$100,000 Per Owner
Now, the assessment fees are soon to become due for condo owners of Ormond Beach, which many are finding out will be more than they can handle.
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“Now it’s over $100,000 per owner,” said self-described snowbird Parks Huffstelter to Orlando News 6. “The hope is, when we get the restoration part done, then the units will be worth more and I can sell. Right now, we’re stuck.”
Feeling Blindsided
These owners feel blindsided by the new law. Huffstetler said he was not told about the assessment fee when he bought his condo in 2021.
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“I’m a retired teacher so we don’t have hundreds of thousands of dollars set aside somewhere that we can contribute so it put me in a position where I had to return to work,” said building resident Janet Stone.
Sell or Return to Work
Retired residents are being faced with a difficult decision in the wake of these assessment fees. They will either have to sell and walk away, or return to work to try to afford the costs.
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“We have buildings where it’s every few weeks we get a call of ‘I just have got to sell I can’t afford to do this,’” said vacation rental property manager Krista Goodrich.
Affecting the Market
Goodrich says that the fear of these giant assessment fees is making the market skittish, resulting in fewer buyers and a condo supply increase.
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“The inventory has certainly increased of what’s available on the market and I think that’s going to stay for a while because people are very fearful of buying a property that’s got a giant assessment on it,” Goodrich said.
Building Longevity
While these assessment fees are stinging condo owners in not just Ormond Beach but other areas, Stone asserted that in the long run, it would be better for the survival of the buildings.
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“The cost is prohibitive but it makes a difference,” said Stone.
Other Assessment Fees in Florida
The new real estate landscape challenged by conditions in Florida also extends beyond condos. In June, a letter from HOA leaders to homeowners in a Pinellas County HOA shocked residents with special assessment fees that could be up to $60,000 by October.
Office of the Governor of Florida/Wikimedia Commons
“I was in shock, I immediately started texting other neighbors,” said Tammy Rodeffer, a homeowner in The Villas of Carillon in Feather Sound.
Losing Homes
Roedeffer felt that this assessment fee could result in people being forced to sell their homes or having them foreclosed on.
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“There will be a lot of people that lose their home either they have to sell or they can’t make these payments. They’ll have a lien put on their house, foreclosures. I’m concerned about the overall community,” Rodeffer said.
Total Surprise
Homeowner Chris Hu was taken completely by surprise at the fee increase as the letter described a “significant financial challenge moving forward.”
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“I thought, wow, this is real?” said Hu. “A total surprise. It’s a shocking surprise.”