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Tag: Anna Maria Island condos

Condominium deconversion

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Remember The Champlain Towers South condominium in Surfside, Florida? Probably haven’t heard that name in a while, but it was the very shocking collapse of the tower with loss of the building and loss of life. The event profoundly impacted the condominium market in the state and is still having an influence on the condo market.

A condo termination, also known as a condominium deconversion, refers to the process in which a condominium association legally dissolves. Condo terminations occur for several reasons including economic, aging or the desire of unit owners to capitalize on the real estate market. It can also happen when a developer gradually buys up units within the association in an effort to gain the number of condo units necessary to control the future of the building.

Typically, because of a lack of prime property, usually waterfront, developers are pursuing older buildings, taking control and tearing them down. Although this can happen anywhere in the state, it is more common on the east coast where there are many more older buildings and very little land left.

These buildings have become targets for developers after the state passed a law that requires certain older buildings to undergo safety inspections that often require special assessments that can run to more than $150,000 per unit, making it impossible for the majority of owners to pay.

Many of the older buildings have elderly residents who have lived there for many years and have not voted, along with their board members, to perform the necessary maintenance due to the high costs. Because of this deferred maintenance, it is leading to deteriorating building conditions and failure of the Florida state inspections.

The only way for residents to continue living in their units is to pay special assessments for work required to pass the state inspections. In addition, insurance costs have increased due to the increased risk of natural disasters, adding to the financial burden on owners and associations and leaving an opening for more condominium terminations.

Condo owners frequently welcome the price developers are willing to pay to sell, which are generally above market value. Savvy owners also understand they likely will not be able to afford the special assessments necessary to maintain the buildings and are happy to get out from under the albatross that can become an older condo building.

However, in March of this year, a small group of residents refused to sell their units, preventing a developer takeover, and they were upheld in the appeals court. This was a stunning outcome for Florida east coast developers who have borrowed funds to buy the buildings. They will, of course, appeal the decision and bring it to the Florida Supreme Court if the appeals court does not reconsider.

Nevertheless, until this is settled, there is a hold on condo terminations unless the owners all agree based on their condominium documents, or until the developers are successful in purchasing enough units to change the documents.

With land value along Florida’s coastline exceeding the value of the buildings, don’t expect this to end soon. It’s a sad situation for older residents who have to find a new home, but the reality is they may have no other option and accepting a developer’s offer will save them years of stress.

Castles in the Sand

Florida seniors caught in trap

Written by Louise Bolger on . Posted in Business, Castles in the Sand.

Last week we talked about the insurance nightmare affecting all homeowners in the state of Florida. However, there is one group of residents having a more difficult time resolving their insurance issues, and those homeowners are seniors.

As I pointed out last week, homeowner’s premiums are increasing rapidly for everyone and that’s assuming your current company even offers you a renewal. Also, properties with aging roofs are a target of insurance companies. They will either not renew your policy if you have an old roof or give you a time frame in which to replace the roof.

This impacts everyone in the state, but seniors are hurt the most since they may not have the resources to replace roofs, and I don’t just mean the funds, I also mean the ability to go through the process of roof replacement and interfacing with insurance companies. Nevertheless, this is something that has to be done not only in order to have insurance on your property but also in the event that you need to sell, a situation many seniors are finding themselves in.

Even if your insurance company hasn’t asked for a roof replacement yet, when you want to sell your property, a home inspector will point out to prospective buyers the age of the roof and the liabilities involved in having an aging roof. Most buyers will not proceed without some guarantee of roof replacement, and most won’t even enter into a contract without the roof being replaced. This is only further complicated by the shortage of replacement roofing materials, particularly when they are dictated by condo documents, and the shortage of workers, resulting in long lead times for roof replacements.

In Manatee County, we have many seniors living in over-55 condo communities. As previously stated, condos have been particularly hard hit by new roof requirements, and many of the older communities with older populations have not adequately set aside reserves for this purpose, resulting in assessments to residents. Florida living, which attracted senior citizens because of the affordability of properties and living expenses, is suddenly making living in Florida unaffordable for the most vulnerable of our population.

Seniors can also anticipate the possibility of repairs based on the milestone inspections the state has approved for condominiums based on location, height and age. Again, not all community associations have done their due diligence in maintaining properties and this law could impact these senior communities where people have lived for decades.

Everyone in the state needs to budget for the possibility of maintenance issues and repairs in their single-family homes or condos, but seniors particularly need to educate themselves on how this may affect their wealth and lifestyle. Certainly, younger family members should be made aware of these issues and start making plans to assist this generation.

Manatee County has elder law legal aid and pro bono services available, but not all seniors will qualify for this service. The state has a legal helpline that is free to all seniors over 60 with limited ability to answer complicated issues, but they could point you in the right direction. It’s called The Department of Elder Affairs Florida Senior Legal Helpline at 888-895-7873. However, if you have the financial ability, the best thing for seniors to do when facing one of these problems is to hire a private elder attorney.

Undoubtedly life isn’t fair, and seniors who may not have had a real estate transaction in decades are finding out they can’t sell their home until they have a new roof, then finding out the new roof could take months. Plan ahead and ask for help is my best advice; the insurance issues will not go away anytime soon.