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Tag: condominium

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.

Castles in the Sand

Priced out of single-family homes? Try a condo

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

It’s wild out there, and if you read my column last week, you’ll understand just how wild it is. The value of homes on Anna Maria Island is soaring, and it’s not uncommon to see listings not just over $1 million but also $2 million, $3 million and $4 million. Last week, I even reported $5 million and $6 million sales or listings on the Island.

So, what’s a person to do? Most of the high-end properties are single-family with some high-end condos mixed in, but maybe the way to get on the Island near the water in a more affordable price range is to take condo living more seriously.

In the waterfront areas that I report on, Cortez and the three cities on Anna Maria Island, there are several condo communities, some with excellent waterfront, water view or water access with close proximity to the beach. Condos generally are priced lower than single-family homes in these areas and may give you a greater bang for your buck. But the real question is, are you a condo person?

I’ve written about condo living before, but at this point in time, it seems to be even more important to buyers who are priced out of single-family homes. It’s not that complicated and, in many respects, more advantageous to own a condo – especially if it’s a second home.

First of all, if you have never owned or lived in a condo association, you have a lot of research to do, starting with a lack of privacy. Not everyone is comfortable with someone living over their heads or on the other side of a common wall. Getting your newspaper in the morning could be embarrassing if you’re not appropriately dressed and it’s time for Fido down the hall to go for his morning walk. And, while we’re on the subject of pets, how do you feel about pets in close proximity to where you live? There are condos that have pet restrictions including no pets, small pets or a cap on the number of pets – something else to research.

Condo ownership is very much like communal living. A board of directors makes a lot of decisions that could affect your lifestyle and finances. Not that you can’t have a say in the operations of the association, but, as in most communal situations, the majority rules. There are rules and regulations that may or may not be a problem for you. For example, your teenage grandchildren visiting and using the pool after hours or hosting parties may guarantee you a letter from the association.

Of course, the advantages – especially for part-time residents – is walking out your front door and not worrying who’s cutting the lawn and cleaning the pool for several months. Association fees will cover all maintenance and repairs in regular condos; townhouse condo owners could be responsible for a larger share of the expenses. In addition, insurance and the all-important flood insurance for the association are paid for in the maintenance fees, therefore, you only need to carry a homeowner’s policy for your individual unit.

Life is always a compromise, and if you can’t find what you want within your price range in a single-family home, consider looking at condos even if you never thought you were a condo person. Granted, you have to assume you will have limited control, but if you can adopt a “live and let live” psychology you will be just fine and eventually learn to love the freedom. Stay safe.

Castles in the Sand

Examine your condo flood insurance

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

Last week, I reviewed a fairly new nonprofit called First Street Foundation, established to help homeowners understand FEMA flood zones and potential flood zones not yet recognized by FEMA. I also pointed out what I feel is a valuable addition to realtor.com for potential homeowners called the Flood Factor, which provides valuable information to all homeowners and potential homeowners about the flood risk of a particular property.

But what if you live in a condominium complex or are considering purchasing a condo that is in an established flood zone?

Condominium flood insurance is a different animal than flood insurance for a single-family home. The principals are the same, but the requirements and responsibility for condo flood insurance are completely different.

Recognized condominium associations – the corporate entity responsible for the management and operation of a condominium – is eligible to purchase flood insurance for all common property located in a special flood hazard area. The boards of directors of condominium associations typically are responsible under their bylaws for maintaining all forms of property insurance necessary to protect the common property of the association against all hazards, including flooding.

The cost to cover the condo association’s flood insurance is included in each individual homeowner’s fees and is something that condo owners who live in a flood zone should be proactive in understanding. If the association does not carry adequate insurance or is negligent in allowing it to lapse, the owners will be responsible for the damage in the event of a flood.

In addition, condo owners who have a mortgage on their unit will be required to give proof on an annual basis to their lender that the condo association does provide adequate insurance for the association’s property. If this proof cannot be provided, mortgage lenders could purchase a policy on the owner’s behalf to protect their investment.

Many condo owners have additional flood insurance for their individual units. This, in my opinion, is a gray area as to whether or not it’s necessary and what exactly it covers, especially if the property is well above typical flooding for the location. My personal experience is that obtaining personal flood insurance is not as easy as it sounds. I was asked to provide elevation certificates and pictures of the building I live in and one time after I had paid the premium, it was refunded, and the insurance turned down. However, per FEMA’s manual, this is a conversation you should have with a qualified insurance broker who sells flood insurance for FEMA if you want to add a flood policy to your condo.

Another confusing area of flood insurance is what it covers or doesn’t cover. Damage caused by moisture or mildew that could have been prevented by the homeowner is not covered; living expenses or temporary housing, damaged vehicles, business interruption and other fine print areas are not covered. Also, if water gets into your condo during a storm there could be an issue as to where the water came from and if the damage is covered by your homeowner’s insurance or your flood insurance policy.

Condo flood insurance is one of the most misunderstood areas of flood insurance in general. It’s important that you know and understand what your condominium association covers and that they are competent in their decisions on your behalf. If you think adding a personal flood policy is beneficial, this is something where you will need to get additional advice.

We seem to be making better progress in understanding flood insurance and since our hurricane season is just about over, it’s easy to put out of our minds, but something you need to stay on top of. Stay safe.