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Tag: Champlian Towers

Castles in the Sand

Condo takeovers

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

Condo termination. Those are fighting words to condo owners who are living in prime waterfront locations in Florida. However, it’s going on right now in Southeast Florida, all because of the collapse of the Champlain South condos in Surfside.

Developers in the Miami Beach area and all along the barrier island going north are swarming to the area in order to acquire older waterfront condominium buildings, and there are plenty of them. Hundreds of condo buildings, representing more than two-thirds of condos in the Miami area alone, are either approaching 40 years old or have reached that age and gone beyond. At that age, the county requires a recertification to make sure the property is still structurally sound.

Although the Surfside collapse is still under investigation, engineers have determined that a combination of problems likely was at fault. They have confirmed design flaws, poor construction and delayed maintenance because owners were reluctant to spend the money required to retrofit the property.

The Miami Herald recently reported in their e-edition that an investigation of the court records after the collapse revealed as far back as five years ago that contractors of a new building next door were concerned about the vibrations affecting the Champlain South building. At that time, they halted drilling, then resumed, but according to the engineers, that alone could not have been the cause of the collapse five years later.

It was recently reported by the Wall Street Journal that at least eight waterfront condo buildings in the Miami area are in sales discussions with developers. These buildings are in prime locations and developers are frequently offering to pay owners above market value for their condos. The buildings will then be demolished, and high-end residences will be built to accommodate wealthy buyers who are relocating to Florida in droves.

Developers of one of the condos going through termination are offering more than $750,000 for studio apartments that sold for around $55,000 in the late 90s. However, condo termination is not easy even when developers are offering more than these owners ever dreamed. In addition, condo regulations for every association are different and sometimes can be ambiguous. Some buildings require as few as 75% of its residents to vote in favor of termination; others can require 100%. And of course, every resident has a different take on what’s the best thing to do; many are facing the prospect of having to relocate from an area they may have lived in for 30 years and will likely not be able to replicate what they had and certainly not the view.

Developers are taking the position that they are offering a private sector solution to the problem by buying out residents who probably couldn’t afford the assessment to bring the building up to a recertification level. Owners have their equity and can move on and builders are offering high-end brand new condos built to today’s standards, revitalizing the area.

In March, the Florida legislative session ended without any new building recertification requirements. Holmes Beach is taking it into their own hands and are considering creating their own safety measures. The commissioners will again take up the issue of recertification on older buildings on the Island in an effort to protect both homeowners and visitors.

The real estate market is nothing if not fluid. Whoever would have guessed not that many years ago that condo termination would be a phrase the average waterfront homeowner would be adding to their vocabulary? So goes Florida, never a dull moment.

More Castles in the Sand

Is it worth the walk?

Does anyone know what’s going on?

Castles in the Sand

Just when you think you’ve seen it all

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

At the end of June, every waterfront condo owner in the state of Florida had what may have been the shock of their real estate lives. The collapse of the oceanfront Champlain Towers South in Surfside, Florida changed our waterfront living comfort zone from a little risky to outright dangerous. The question is, is this a temporary spike in the risk factor radar, or is Florida in for a sea – so to speak – change?

According to realtor.com, many property owners, at least in southeast Florida along the barrier islands, are expected to put their condos on the market. In the near term, this is going to have a big impact on the luxury real estate market. Frightened buyers will be more hesitant even at discounted prices to go forward with a purchase, particularly in older buildings, but newer buildings will feel the fallout as well.

Since it will take at least a year to determine the reason for the building collapse, it will take at least that long as well for the southeast Florida beachfront real estate market to stabilize.

For those properties already under contract, buyers will be looking to modify the contract insisting on the results of additional inspections prior to concluding the transaction. Going forward, we can expect engineer and building inspections of properties on the beach to expand with specialists in this field being hired in addition to regular home inspectors.

Overall, condo fees are sure to go up. Condo boards will be more inclined to hire experts to review work on the building structure and have them sign off on major improvement projects. Some of these extra expenses may not have been budgeted for, leaving special assessments as the only option. I’ve talked a lot in this space about choosing the correct condo board and if this incident doesn’t reinforce that, I don’t know what will. Gone are the days where condo boards make structural decisions without a professional study, or at least those days should be gone.

Anna Maria Island thankfully only has one tallish condo complex. The Martinique is a mid-rise complex with two buildings built in the 1970s with each building having seven stories, built directly on the sand with magnificent Gulf views. After these were constructed, the zoning for all three cities on the Island changed so that no more high buildings were allowed. We can consider ourselves lucky that town commissioners at the time made this decision, avoiding high-rise condos lined up on the beach like so many other barrier island towns in Florida.

So, what’s next? To start with, a task force has already been created to investigate Florida’s laws surrounding condominiums and make recommendations for legal reforms to the governor’s office and state Legislature. Their goal is to determine whether regulatory changes could minimize the likelihood of another tragedy like the Surfside building collapse. Gov. Ron DeSantis has not fully signed on to the task force and is of the opinion that Champlain Towers South has been shown to have had structural problems from the beginning. Nevertheless, he left the door open as to whether he would support the outcome of the task force’s findings.

Is this the tip of the iceberg, or the one-off event that we hope it is? Is it a teaching moment and a warning, or is it a knee-jerk reaction? Either way, never underestimate the lure of the ocean. Buyers will be nervous, but this too will pass, leaving in its place the possibility of better building codes and regulations for older buildings and new ones going forward.