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An Oct. 5 article by Bisnow.com, the real estate industry news site, quoted firm shareholder Lindsey Thurswell Lehr on the state of condominium terminations in South Florida. The article, which is headlined “Facing Skyrocketing Bills, South Florida Condo Owners Are Now Knocking on Developers’ Doors,” focuses on how some area condominium communities are now seeking out buyout offers from prominent developers. It reads:
Condo owners across South Florida aren’t waiting for developers anymore — they’re knocking on doors themselves, asking for buyouts.
A 2022 law forcing older buildings through strict recertifications has left associations drowning in repair bills and declining values. And with a Dec. 31 deadline to fully fund reserves bearing down, more owners are turning to developers as their only exit. . .
. . . After the Surfside condo collapse killed 98 residents in 2021, Gov. Ron DeSantis signed Senate Bill 4-D the next year. The law requires condo buildings at least 30 years old and three stories or taller to undergo structural inspections every 10 years and to maintain reserve funds by the end of 2024.
The law pushed many older buildings into a financial “doom loop,” which means multimillion-dollar repair bills, plunging values and soaring association fees and insurance premiums.
On top of that, Fannie Mae is increasingly blacklisting aging units from loan backing, and Florida engineers — critical for inspections — are steering clear of recertification and repair work over litigation and liability fears.
Developers have also grown wary of condo terminations amid unclear legal standards, some requiring nearly unanimous owner approval, raising the risk of drawn-out litigation.
In June, DeSantis signed House Bill 913, which extended the reserve study deadline to Dec. 31 and allowed associations to tap loans or credit lines for reserves. But the extension didn’t erase the costs, leaving many owners still struggling to stay in their buildings. . .
. . . Many associations missed the 2024 study deadline, but they are now starting to catch up as they move ahead with required repairs and maintenance, said Lindsey Lehr, a shareholder at Siegfried Rivera.
Once inspections are done, at a cost of at least $35K, the assessments start rolling in. That is when associations more often begin exploring other options, lawyers and brokers told Bisnow.
“I even have buildings that have undertaken repairs and still have future repairs. They’ve spent millions of dollars, and they’re still wanting a termination because the costs are so high and the money being offered is significant,” said Lehr, who represents community associations and developers in condo buyout deals. . .
The article concludes by noting that with so many developers ready to buy, expectations need to come down as more associations test the market. It states that many associations are basing offers on prices developers were paying in 2021 and 2022, when appetite was stronger. Now, with more opportunities available, some owners are asking nearly double what developers would pay today.
Our firm salutes Lindsey for sharing her insights on the current state of condominium terminations in South Florida with the readers of Bisnow.com. Click here to read the complete article.
Our South Florida community association attorneys write about important matters for associations in this blog and our Miami Herald column, which appears every two weeks on Sundays, and we encourage association directors, members and property managers to click here and subscribe to our newsletter to receive our future articles.