A Condo association is an association of owners or renters in an apartment block or building divided into separate apartments. The condominium owners own their units and have joint ownership in the building. The COA fees cover the common areas and building repairs and maintenance. Property management companies have a wealth of experience and talent covering the full range of challenges these unique associations face, thus when the COA board finds themselves against an issue they can reach out to the well-known management company for the guidance they need.
Condo owners and associations are a huge constituency in Florida. According to Eric Glazer, Conda attorney, almost 27000 condo associations represent owners of 1.52 million condominiums with practically 3 million residents. Nearly 1 million of those properties are old housing 2 million residents. The question here arises how many Florida associations are financially sound? The answer depends on whether the COA has enough budget to operate, maintain, and provide security to the building. Conda owner associations must be able to pay current operating costs and be ready for future maintenance and replacement costs without going into debt.
Requirements for Maintaining Condominiums
After a building collapse in Surfside that claimed 98 lives, Florida lawmakers unanimously passed legislation addressing condominium regulations. This bill would impose more stringent requirements on condominium association cash reserves and require more frequent inspections of condo buildings. According to the revised Florida Statute Chapter 718, governing condominiums would fulfill the following:
- Inspections after the first 25 years and every 10 years for condos three stories above 3 meters of the coast.
- Complete inspections by Dec. 31, 2024, for the condos occupied before July 1, 1992.
- Prohibit waiving reserve requirements to pay for additional or routine repairs and maintenance.
- Inspection records must be available to unit towers, associations, and renters.
- Two-phase engineers are required for structural deterioration.
Also Read: How Can A Condo Management Company Help Improve Your ROI?
Things To Keep In Mind While Reviewing COA’s Finances
- Whether a real reserve study performed by the third-party professional based on an onsite visit or not?
- Has the structural inspection been performed especially for high-rise buildings in the last few years by licensed architects or engineers?
- Who determined the initial estimated useful life numbers? This aspect is important because using long artificial numbers lowers the calculated reserved contributions required.
- Have onsite inspections been performed recently to see if life estimates are still accurate? Florida's environment accelerates the deterioration of all association elements significantly therefore, remaining life estimates must be adjusted regularly to account for environmental exposure, maintenance level, and physical components.
- Whether the Remaining Life estimates have been correctly adjusted year to year or not in the Association’s financial documents? Without physical inspection, this is just an error or an attempt to quietly extend required maintenance.
- Check for any unexplained transfers into or out of Association financial accounts since the last maintenance.
Conclusion
Delayed building maintenance compromises the resident's safety and leads to expensive and unexpected Assessments. So in this article, all the right questions are explained for Florida condo buyers to ask when rewiring Condo Owner Association finances. The answers to these questions will affect their buying decisions and purchase.
