The Champlain Towers South collapse revealed an astronomical hidden cost of condo living. Here's how to avoid a five-figure maintenance bill.
The partial collapse of the Champlain Towers South condo in Surfside, Fla. has high-rise dwellers wondering whether their building could be next.
In general, building collapses are extremely rare -- especially in buildings constructed in the last twenty years. The Surfside incident is almost certainly an anomaly and not part of a larger pattern.
However, the collapse revealed a potential astronomical hidden cost of condo ownership that new homebuyers should consider before opting for this type of property.
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The hidden cost of condo living: deferred maintenance
Deferred maintenance is exactly what it sounds like -- repairs that have been postponed, most commonly due to budget issues. The longer these issues are left unrepaired the more severe and expensive they become.
For example, painting a house typically costs a few thousand dollars. But, if it’s delayed for too long, paint starts to chip, boards start to rot, and the extra work to repair these issues adds to the overall cost of the project.
At Champlain Towers South, the building needed more than $9 million in repairs, according to ABC News. Condo owners were looking at assessments between $80,000 and $330,000 -- depending on the type of unit -- to be paid upfront or in installments beginning July 1.
While building collapses are rare, these multi-million dollar condo repairs are not. According to the Miami Herald, a 500-unit condo in Miami Beach performed $18 million in repairs and updates to the 40-year-old building’s balconies, railings, parking garage and windows. A 230-unit complex in Fort Lauderdale spent $2.5 million just on new paint, roofing, and elevators.
Just like homeowners, condo-owners are on the hook for maintenance costs. But how and when repairs are made is decided largely by the condo boards. Ideally, the board approves regular, proactive maintenance and stashes away money from the owners’ monthly maintenance fees to create a rainy day fund. However, that rainy day fund isn’t always sufficient for major repairs, and it can be difficult to approve and fund costly projects.
Check the condo’s budget before wrecking yours
So how can condo-buyers make sure there isn’t a five-figure deferred maintenance bill waiting to fall in their lap?
A good place to start is the public records at a local municipality. Building code violations are a matter of public record and can be requested from the city, county, or state.
According to the Miami Herald, condo associations are also required to keep certain records, including special assessments and budget reports, depending on which state they are in. In Florida, construction bids and contracts are considered official records and must be publicly available. Condo boards and homeowners associations (HOAs) also typically keep records of their meetings so current and prospective owners can see what’s being discussed.
Reviewing public documents should provide a sense of the past, present, and future of the building's maintenance, and whether there is enough money in the budget to fund upcoming projects.
If the building is older, check to see if it has undergone a 40-year recertification and what type of maintenance and restoration has been done. If there is nothing in the public records, that should be a red flag -- especially for older buildings.
While a disaster like the Champlain Tower collapse is exceedingly rare, condo-owners footing the bill for deferred maintenance is not. Doing your homework before buying a condo is key to saving yourself from this financial burden.
Some references sourced within this article have not been prepared by Fairway and are distributed for educational purposes only. The information is not guaranteed to be accurate and may not entirely represent the opinions of Fairway.
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