As Florida's Condo Market Collaspes, Governor DeSantis Backtracks on His New Condo Law "Condo 3.0" Will It Be Too Little Too Late?
Fort Lauderdale, FL. Florida's condominium market is in chaos following the implementation of new laws that have thrown Homeowners Associations (HOAs) into fiancial disarray. The laws, intended to increase safety and accountability within condominium associations, have instead led to a fee surge and a devastating decline in the condo market. Governor Ron DeSantis is now considering a special session to address these issues.
The New Condo Laws The new laws, commonly referred to as the "DeSantis Condo Law" or "Condo 3.0," were signed by Governor DeSantis and became effective on July 1, 2024. The laws introduced significant amendments to the statutory framework governing community associations in Florida. These changes affected the behavior and responsibilities of condominium associations and board members, as well as the rights of unit owners.
One of the key changes was the requirement for condo boards to have fully funded reserves to keep residents safe. Some Condo Owners Associations (COAs) implemented exorbitant fees and huge special assessments. Additionally, the law required condo buildings of three or more stories to receive an inspection after 30 years. Condo associations were also required to conduct studies of the necessary reserves needed to pay for large maintenance repairs, including roof replacements and any needed structural upkeep or replacements.
Key changes included:
The requirement for condo boards to have fully funded reserves to keep residents safe
Mandatory inspections for condo buildings of three or more stories after 30 years
Condo associations are required to conduct studies of necessary reserves needed to pay for large maintenance repairs
The Impact on the Condo Market The new requirements have led to devastating jumps in assessments, with some reaching six figures. In response, many condo owners opt to sell their units for significant losses. In May, the Wall Street Journal reported that condos for sale in South Florida have doubled since the first quarter of 2023 to 18,000 units.
Furthermore, a financial disaster may await Florida condo owners already on the edge at the end of the year, as new regulations may cause association maintenance fees to skyrocket. Many associations may face repair costs in the millions. Even after allocating those costs among all unit owners, many owners in older buildings may not be able to afford the increased maintenance fees and special assessments to make immediate repairs.
DeSantis's Backtracks In light of the chaos, Governor DeSantis has stated that the Legislature should convene a special session to fix the law that spurred condo assessment increases. "If the Legislature has ideas about how to make this more sensible for people, I'm totally open to all that," DeSantis told reporters.
The Governor's statement indicates a willingness to revisit the laws and make necessary adjustments to alleviate the burden on condo owners. However, the Legislature would need to develop any changes after consulting with those affected by the laws.
Going Forward The new condo laws in Florida have had a significant impact on the condo market and the lives of condo owners. While the laws aimed to increase safety and accountability, the unintended consequences have caused chaos. It remains to be seen how the Legislature will respond to the call for a special session and what changes will be made to alleviate the burden on condo owners.
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