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THANK YOU REPRESENTATIVE DAVID BORRERO!  By Eric Glazer, Esq

THANK YOU REPRESENTATIVE DAVID BORRERO! By Eric Glazer, Esq

  • Posted: Nov 16, 2021
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THANK YOU REPRESENTATIVE DAVID BORRERO!

By Eric Glazer, Esq

A few weeks ago, I wrote a blog called  “It’s Time To Stop A True Florida Farce.”  I then wrote a blog thanking Senator Anna Maria Rodriguez for filing Senate Bill 394 which does away with the possibility of  members of community association boards of directors getting certified without taking an educational class.  Instead, they can sign a rather silly piece of paper that states they have read their governing documents and promise to enforce them.

We were half way there.  We now needed a member of Florida’s House of Representatives who would file a companion bill in Florida’s House, mirroring the bill filed by Senator Rodriguez.  I received a phone call from Representative Borerro about 2 weeks ago.  He grilled me as to why I thought my bill was so important.  The silliness of the form that directors can sign.  The fact that there is going to be lots of new laws passed by The Florida Legislature in regards to condominiums, but no requirement that directors have to learn these new laws.  And finally, the fact that mandatory education can and will save lives.

I am honored and now happy to report that Representative Borerro has now filed bill 547 in Florida’s House of Representatives.  It mirrors the bill filed by Senator Rodriguez.  There is no way I can thank Representative Borerro enough.

There is no doubt in my mind that mandatory education will save the lives, properties and money of the millions of people who live in condominiums throughout the state.  Florida would be the first and only state to require a board member to take an educational course.  That would be an amazing bright spot for our state and no doubt would lead other states to eventually adopt similar requirements.

Over the last few weeks, I had the pleasure of teaching my Condo Craze and HOAs Board Certification class in Broward, Miami, Tampa, Palm Beach and Orlando to so many people.  I taught the importance of having reserve accounts, having reserve studies done by qualified people and the danger in completely waiving the funding of reserve accounts year after year after year.  Interestingly enough, when I asked the crowd if they thought education for board members should be mandatory, everyone raised their hand.  Almost everyone said they would never vote for a director who refused to take an educational class.

      Anyone who won’t devote a few hours a year to learning the new condo laws does not deserve to be on the board in the first place.

In any event, we owe a debt of gratitude to Senator Rodriguez and now Representative Borerro for their efforts in taking this matter seriously.  Keep track of Senate Bill 394 and House Bill 547.  Urge your local House Member and Senator to please support them.  If I never get another piece of legislation passed, this is the one that is nearest and dearest to my heart.  This would really be my greatest honor and legacy.  Education is the key to running a safe community.

 

GET READY FOR SOME STICKER SHOCK  By Eric Glazer, Esq.

GET READY FOR SOME STICKER SHOCK By Eric Glazer, Esq.

  • Posted: Nov 11, 2021
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GET READY FOR SOME STICKER SHOCK

By Eric Glazer, Esq.

In the last 24 hours I was told of two different association annual budgets going up massively for the coming year.  We are talking about over 35% increases in the budget.  Think about that.  If your assessments are already $600.00 per month, you probably can expect going to $850.00 per month.  If you’re already at $800.00 per month, you’re about to go over a thousand.

It’s actually worse though, on a smaller scale.  People that are only paying $400.00 per month will now be going to around $550.00 per month.  It’s going to hurt them the most.  It always hurts the poorer people the most.

Add this on to the rising costs of gasoline, food, utilities and insurance and we are looking at a real crisis coming up.  Just remember, we can also expect that The Florida Legislature will likely be passing laws this year making it impossible to completely waive the funding of your reserve accounts.  So, on top of everything we just mentioned, get ready for your assessments to go up even hire when you are forced to pay in advance for future repairs.

For those of you that have not started addressing your budget for next year yet, I would get busy immediately.  You’re fooling yourself if you think that by avoiding it, things won’t change.  They will.  Unfortunately, all of these causes are coming together like a perfect storm.  Thank heavens most people don’t have adjustable rate mortgages any longer because if they did and mortgage rates started going up, things would be even worse.

I’m telling you what’s definitely coming.  The question is…..are there any solutions to prevent these increases.  I don’t think there are.  What things can you cut from your budget to offset these increases?  What steps can you take to curb costs?  I’m open to suggestions but I just don’t see good things on the horizon.  I can tell you that at least in my office, it’s starting to feel like foreclosures and delinquencies are already on the rise.  How do we put the brakes on another foreclosure crisis?

 

 

 

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The association suddenly needs a lot of money. How do you get it? Which way makes sense?

The association suddenly needs a lot of money. How do you get it? Which way makes sense?

  • Posted: Oct 29, 2021
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The association suddenly needs a lot of money. How do you get it? Which way makes sense?

So many of our buildings are approaching the 40 year mark, requiring recertification in electrical and structural.  Many buildings are younger yet still need major repairs to the concrete, balconies, pool decks and other portions of the common elements.  The board is going to need a lot of money.  Assuming you don’t have enough in reserves, how do you get it?

Of course, one way is to simply pass a special assessment.  In effect, that means that you will have all the money necessary to pay for all the repairs, before the repairs are done.  The problem with a special assessment…………. Everyone has to come up with a lot of money relatively quickly, if not immediately.  Some people simply don’t have it.  If they don’t they face possible foreclosure by the association.

What is certainly becoming the more common way of coming up with money to make repairs to the common elements is for the association to borrow the money from a bank.  Rates are still very low and money is very cheap right now.  Typically, the bank gives the association a line of credit for one year that the association may draw upon to pay for the cost of repairs.  After one year, the funds borrowed from the line of credit are converted to a term loan, usually anywhere from three to seven years.

There are of course many advantages to borrowing rather than assessing.  First and foremost, the owners need not come up with their entire share of the special assessment immediately.  Instead, they get to pay off the bank loan over several years.  In addition, the board can establish payment schedules that would allow the owners to have a choice of paying their share of the loan off immediately and without interest.  Or, the board can allow the owners to pay off their share of the loan over time, with interest.

Before signing for the loan, the bank will always ask association’s counsel to review the governing documents and write an “opinion  of counsel” as to whether or not the association has the right to borrow money.  Under the Florida not for profit statutes, the association has the right to borrow.  However, the governing documents should be read carefully because sometimes it clearly states that the association cannot borrow money without a vote of the community.

In terms of collateral, the association is not signing a mortgage encumbering the common elements.  Remember, the common elements are owned by the owners and not the association.  Instead, the association will be signing a Collateral Assignment of Lien Rights which authorizes the bank to demand the monthly assessments directly from each unit owner, should the association default in its payment obligations to the bank.

If you have any additional questions about how the process works, give us a call.  By Eric Glazer, Esq  http://condocrazeandhoas.com/

 

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The more trouble your condo is in, the more developers may be interested in buying you out.

The more trouble your condo is in, the more developers may be interested in buying you out.

  • Posted: Oct 26, 2021
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The more trouble your condo is in, the more developers may be interested in buying you out.

 

DEVELOPERS ARE ON THE PROWL

By Eric Glazer, Esq.

I got a call this week from The Miami Herald.  They asked if I had heard about the prominent developer who approached the owners of the other Champlain Towers buildings that are still standing, offering to buy out all of their units.  I had not, but I’m not surprised in the least about it.  In fact, it’s going to be happening more and more.  Developers are going to be approaching lots of owners in condominiums that are distressed.

 

Why approach the owners in the remaining Champlain Towers condominiums?  I’m sure the developer is thinking that these owners may now have a hard time selling their condo units on the open market because there may not be many buyers interested in purchasing a unit in a condominium by that name.  The Champlain Towers will forever be remembered as the building that collapsed and where nearly a hundred innocent people died.  I think the developer is right.  It will be tough to sell your units in the remaining Champlain Towers condominiums.

 

The truth is……if that’s the case…and it is next to impossible to now sell your condo unit in these buildings, the developer can look like a knight in shining armor, if the price they offer is fair and reasonable.  It may very well make sense for the owners to seriously consider the developer’s offer.  At the remaining Champlain Towers buildings, the developer’s offer is contingent upon 95% of the owners agreeing to sell to the developer.  If less than 95% of the owners agree to sell, the deal is off the table.  That’s because if at least 5% of the owners vote against a plan of “termination” the developer’s plan to “terminate” the condominium, knock it down and build a more expensive one fails.  So, the developer needs to acquire at least 95% to ensure their plan succeeds.

 

We know that it’s about to get more expensive to live in a condominium because it looks like it will become more difficult to waive reserves and buildings will be undergoing more frequent inspections.  Repairs will be needed more than ever before which means money will be needed like never before.  When unit owners don’t have the money or don’t want to spend the money on a building that’s already old, rest assured that developers will be there ready to make an offer to everyone so that the property can be bought, knocked down, rebuilt and sold.

 

Over the last few years the law has made it more difficult to terminate a condominium.  As a result of the tragedy at The Champlain Towers I certainly expect the pendulum to swing back the other way.  Terminations will become easier.  Developers will use their eyes and airs searching for the most vulnerable properties, meaning the ones that will require the greatest cost to repair.  The laws regarding termination continue to evolve, but if I am a developer I may want to be cautious about buying units in a condominium that requires 100% of the owners to agree to termination and that does not have Kaufman language or “as amended from time to time” language.  In these types of condominiums, one owner who refuses to sell may wind up screwing up the developer’s grand plans.

 

 

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THANK YOU SENATOR ANNA MARIA RODRIGUEZ!  By Eric Glazer, Esq.

THANK YOU SENATOR ANNA MARIA RODRIGUEZ! By Eric Glazer, Esq.

  • Posted: Oct 22, 2021
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THANK YOU SENATOR ANNA MARIA RODRIGUEZ!

By Eric Glazer, Esq.

A few weeks ago, I wrote a blog called  It’s Time To Stop A True Florida Farce.  The blog spoke about the fact that members of community association boards of directors can still get certified without taking an educational class.  Instead, they can sign a rather silly piece of paper that states they have read their governing documents and promise to enforce them.  What a joke.

I sent the column by e-mail to all Florida legislators, urging them to change the law and make certification through education mandatory.  Senator Anna Maria Rodriguez asked me to send her my proposed legislation.  I did.  I am happy and so proud to report that Senator Rodriguez filed Senate Bill 394 mirroring my proposed legislation.

 

There is no doubt that mandatory education will save the lives, properties and money of the millions of people who live in condominiums throughout the state.  Florida would be the first and only state to require a board member to take an educational course.  That would be an amazing bright spot for our state and no doubt would lead other states to eventually adopt similar requirements.

 

I had the pleasure of teaching my Condo Craze and HOAs Board Certification class last week in Miami and Palm Beach to so many people.  I taught the importance of having reserve accounts, having reserve studies done by qualified people and the danger in completely waiving the funding of reserve accounts year after year after year.  Interestingly enough, when I asked the crowd if the law should be changed to requiring at least some form of reserves and having the reserve study done by experts, EVERYONE RAISED THEIR HAND.  People want to be safe.  We learned a lot after the Champlain Towers disaster.

 

Think about this.  The Florida Legislature will no doubt make some massive changes to Florida law in this regard.  But if members of the Board are not required to attend an educational class, how in the world can they be expected to learn the new laws.  And by the way….I don’t want to hear the excused that these classes are burdensome.  They are offered on-line and they are offered for free.  Anyone who won’t devote a few hours a year to learning the new condo laws does not deserve to be on the board in the first place.

 

In any event, we owe a debt of gratitude to Senator Rodriguez for her efforts in taking this matter seriously.  Keep track of Senate Bill 394 and urge your local House Member and Senator to please support it.  If I never get another piece of legislation passed, this is the one that is nearest and dearest to my heart.  Education is the key to running a safe community.

 

Over a decade ago The Florida Legislature thought it was a good idea for members of condo and HOA boards to become “certified.”  Sounds like a good idea.  The problem is that the legislators  allowed for two ways to become certified. One way is by going over to your computer and printing a form that is on the DBPR’s website that basically says I read my governing documents and promise to enforce them.  You sign the form and you are now certified.  That’s it.  That’s all you have to do.  If you are a director of a condo, the form does not require you to acknowledge the existence of Florida Statute 718.  If you are a member of an HOA board the form does not require you to acknowledge the existence of Florida Statute 720.  The form is a joke.  The procedure is a joke and an embarrassment to The State of Florida.  In fact, many associations still have illegal provisions in their governing documents.  The current law actually allows you to become certified if you promise to enforce the illegal provisions in your governing documents.

 

As my kids go back to school today, I’m proud to say that the second way of becoming certified is by taking a course approved by the DBPR.  As so many of you now, I am most proud of the fact that I have certified over 20,000 board members throughout the state. Better yet, the attendees love it.  They learn about the requirement to fund reserves, Kaufman language, access to records, mandatory financial reporting, the role of the community association manager, legal ways for the board members to vote and hold meetings, preparation of budgets, the importance and hierarchy of your governing documents, rule making, actions of board members that constitute criminal conduct, ways directors can be removed from the board, the Marketable Record Title Act and the importance of preserving your governing documents in an HOA, obligations to maintain insurance, mandatory websites, material alterations, screening, approval and denial of occupants AND SO MUCH MORE.

 

It is an insult to every director who has been certified by taking a course to allow other directors the ability to get certified by signing a stupid self-serving form.  We are now repeatedly learning the hard way throughout our state that lack of knowledge can lead to catastrophic consequences in our communities.

 

MANDATORY EDUCATION FOR BOARD MEMBERS CAN SAVE LIVES. Florida has always led the way when it came to making community association laws that the rest of the country follows.  The State of Florida has the opportunity to become the first state in the country to require that directors become educated before assuming the incredible responsibilities that come with being in charge of our communities.  There is no excuse any longer for a Board member not to take an educational class.  Many law firms, like mine, teach the class on-line.  A board member never even has to leave his or her home in order to become certified.

 

I urge the members of The Florida Legislature to amend the condominium, co-op and HOA statutes to remove the ability to become “certified” by signing a form and instead require attendance at an educational course.  I already drafted the proposed legislation and it’s ready to be filed.  With all my heart, I believe lives can be saved, financial disasters can be avoided and it is in the best interest of the millions of Floridians who live in a community association.  Readers: please contact your legislators if you agree.

 

 

 

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WE’RE BACK LIVE AND IN THE STUDIO, AND WE’RE BACK TEACHING LIVE. by Eric Glazer

WE’RE BACK LIVE AND IN THE STUDIO, AND WE’RE BACK TEACHING LIVE. by Eric Glazer

  • Posted: Oct 15, 2021
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WE’RE BACK LIVE AND IN THE STUDIO. AND WE’RE BACK TEACHING LIVE.

This weeks topics: 

THE IMPORTANCE OF A WEBSITE FOR YOUR ASSOCIATION

EMOTIONAL SUPPORT ANIMALS IN A NO PET COMMUNITY. WHAT IS AN ASSOCIATION TO DO?

 

TAKING YOUR CALLS ON WHATEVER TOPIC YOU NEED ANSWERS TO OR WHATEVER YOU NEED TO GET OFF YOUR CHEST.

WE WILL TAKE YOUR CALLS AND ANSWER YOUR CONDO AND HOA QUESTIONS THROUGHOUT THE HOUR. CALL US AT 877-850-8585 DURING THE SHOW.
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NO ASSOCIATION WEBSITE?  WHAT ARE YOU WAITING FOR?  By Eric Glazer, Esq.

NO ASSOCIATION WEBSITE? WHAT ARE YOU WAITING FOR? By Eric Glazer, Esq.

  • Posted: Oct 05, 2021
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NO ASSOCIATION WEBSITE?  WHAT ARE YOU WAITING FOR?

By Eric Glazer, Esq.

 

When the original bill was filed that required condominiums to have a website, the statute was only going to apply with condominiums of 500 units or more.  In effect, the statute would have applied to less than one percent of all condominiums in the state.  I met with the legislator who drafted the bill and suggested that the bill be revised to apply to all condominiums with 50 units or more.  The compromise was 150 units.

As we know, The Florida Legislature does not like to regulate HOAs, so for whatever reason, HOAs with 150 homes or more are not required to have a website.  Instead, if a homeowner wants access to records, they must make the request by certified mail, return receipt requested.  If the association ignores them, the unit owner has to ask for pre-suit mediation.  If that fails, the unit owner has to file a lawsuit.  All because they wanted copies of some of the official records.  It’s ridiculous.

Why not make your community more transparent and accessible now?  Who cares if you’re an HOA and you’re not required by law to have a website?  Set one up anyway, regardless of the number of homes you have.  Are homeowners in a 50 home community less entitled to see the records than an owner in a 150 home community?  Of course not.

If you’re in a condominium of less than 150 units, I understand that the law does not require your condominium association to have a website containing the official records.  So what?  Create one anyway.  I can tell you that over the past two years, as least as far as the larger condominiums go, there has been less arguments between owners and the board when it comes to being able to access the official records, simply because the association is required to have these official records on an association website.

I will also warn condominium associations that the DBPR is not fooling around when making sure that condominium associations with 150 units or more comply with the law.  They will investigate any complaint received from an owner who claims their association is not complying with the law.  They want those records posted on-line.  The association’s failure to do so can and will result in a fine for several thousand dollars.

Placing the records on-line frees up the manager’s valuable time because now they are less likely to have to respond to unit owner requests for access to records.  I’m looking forward to see how Rafael feels about the law.  Have you had success in your community with the association’s website?  If your community doesn’t have one, would you want one?

 

THE SITE OF THE CHAMPLAIN TOWERS — NOT AN EASY TASK TO DECIDE WHAT TO DO  By Eric Glazer, Esq.

THE SITE OF THE CHAMPLAIN TOWERS — NOT AN EASY TASK TO DECIDE WHAT TO DO By Eric Glazer, Esq.

  • Posted: Sep 29, 2021
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THE SITE OF THE CHAMPLAIN TOWERS — NOT AN EASY TASK TO DECIDE WHAT TO DO

By Eric Glazer, Esq.

I don’t envy Judge Michael Hanzman, the judge who is assigned to decide the fate of the property where The Champlain Towers South Condominium once stood. The question of what to do at this sacred site is not easy. Some families want no re-development and only a memorial. The City of Surfside needs to see residential redevelopment at that site or lose an incredible about of annual real estate tax dollars.

At present, there is an offer to buy the land for $120 million dollars. But that offer doesn’t promise to even put up a memorable plaque marking the spot of the tragedy. Suggestions of rebuilding on the site and forming a memorable tribute somewhere else in Surfside have also not progressed.

According to The Daily Business Review, Hanzman said he is sympathetic to those who want a memorial, but his job is to get the most money for all families of those who died and the approximately 35 families who survived but lost their homes. He has scheduled the auction for late February or early March and said that date is firm because many of the survivors need money to buy new homes.

Judge Hanzman is right, his job is to get the most money for the victims. And, while 120 million sounds like a lot of money, it isn’t when we consider the fact that there were 140 units. There’s another 50 million or so in insurance and this still isn’t even close to being able to compensate the victims and their families all that they are rightfully entitled to.

Then comes an even harder part. How does the court decide who gets what from the limited pot? Does the court allow the family of a 30 year victim to collect more that the family of an 80 year old victim? What about people who survived but were injured? Do they get anything? Of course, everyone needs to get reimbursed for the loss of their unit as well. These are Solomon like decisions the court will ultimately be faced with and they are not easy tasks. Of course, whatever decisions are made there will be people that agree with the court’s conclusions and method of pay-out and those who do not. There is simply no way to make everyone whole financially. And in the end……it’s only money anyway.

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TO ARBITRATE OR MEDIATE?  By Eric Glazer, Esq.

TO ARBITRATE OR MEDIATE? By Eric Glazer, Esq.

  • Posted: Sep 21, 2021
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TO ARBITRATE OR MEDIATE?

By Eric Glazer, Esq.

Prior to July 1st, 2021 if a condominium dispute arose, the parties were forced to first arbitrate the matter before the Department of Business and Professional Regulation.  The law has now changed and reads as follows:

(a) Before the institution of court litigation, a party to a dispute, other than an election or recall dispute, shall either petition the division for nonbinding arbitration or initiate presuit mediation.

As you can see, now the plaintiff has a choice to start the matter in arbitration or mediation.  So which one do you choose?

If you decide to go to arbitration, your case will be assigned to an arbitrator in Tallahassee.  The arbitrator will read the briefs, hold hearings and ultimately enter an order.  Someone will win and someone will lose.  The loser will pay the winner’s attorney’s fees.  The loser can then file in court for a trial de novo.  In effect, it’s an appeal of the arbitrator’s order and the case starts all over again.  The winner of the trial de novo gets their attorney’s fees and costs from the loser, including the arbitration fees.

So….the risk in going to arbitration is that if you lose, you may wind up not only paying your lawyer, but the other side’s lawyer too.

The alternative is to mediate the dispute.  I have been certified since 2007 as a Circuit Court mediator.  I truly enjoy mediating cases and helping the parties resolve their disputes.  At mediation, the parties appear with their attorneys.  The mediator explains that today is a good day to settle the case on mutually agreeable terms, rather than leave your fate up to a judge or jury.  If an agreement is reached, it is enforceable in a court of law.  The mediator allows the parties to make opening statements, then separates the parties and goes back and forth trying to achieve a settlement.

There is very little risk in going to mediation.  There is no “winner” or “loser” at mediation, so neither party has to worry about paying the other side’s attorney’s fees.  The parties split the cost of the mediator.

When I act as a mediator, I explain to the parties that neither side will get everything they want today, and that if at the end of the day both parties feel a little miserable, I probably achieved a fair result.

 

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BEG, STEAL OR BORROW – OR FORECLOSURE?

BEG, STEAL OR BORROW – OR FORECLOSURE?

  • Posted: Sep 21, 2021
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BEG, STEAL OR BORROW – OR FORECLOSURE?

Many of the old condo buildings in the State of Florida are facing serious structural repairs that will cost millions of dollars. And – from what I hear from many owners – most of these buildings have no reserve funds that will cover even most of the cost of these structural repairs.

But these repairs have to be done if the building doesn’t want to face the same fate as the Champlain Towers South in Surfside. And you can be sure that building departments will now push the issue of certification requirements.

That begs the question: How are these associations are paying for these very costly repairs?

The smart associations took care of fully funded reserves, but as we have seen, most of these associations are not really “smart!”

But having reserve funds may cause another problem: Big amounts of money are very tempting – and we have seen in the past that board members and CAMs can’t resist the temptation – and the money is gone when needed.

Asking for fully funded reserves require laws that protect these reserve funds and answers any scams and/or embezzlement with harsh punishments, not just a slap on the wrist. And that should go as well for board members who buy nice palm trees with the money that was in the roof reserve fund!

The other option to pay for these repairs are bank loans, an option available to most of these associations if properly done. But don’t forget: Owners will have to pay in the future monthly quite a lot of money to service this loan. Now owners are paying the money they didn’t pay in the reserve funds earlier – but now with lots of interest added. Smart move? Definitely not!

But the only other option to pay for these repairs is to levy a special assessment. That’s the worst of all options because these special assessments can be very huge, in the tens of thousands of dollars. Amounts many families living in these condos don’t have available – and the worst scenario will happen: FORECLOSURE! Families will be losing their homes. Is that the option you want to go?

 

CAMs – a CAM has no part in a board decision regarding the use of the reserve funds.
How about the responsibility of owners to look after their investment? It’s easy to point fingers at usually well-meaning but inexperienced boards.
Rather than pointing fingers left and right, how about encouraging owners to participate in a constructive manner?
And last not least – the people coming to Florida to buy a condo with the proceeds of their home sale should be aware that you get what you pay for. You pay 500 K for a waterfront two bedroom condo built in the 60’s and expect that is all it will cost you?

 

 

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SHOULD RESERVES BE MANDATORY?

SHOULD RESERVES BE MANDATORY?

  • Posted: Sep 10, 2021
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I hate beating around the bush, so I want to get to the point. A financial crisis is coming and it’s
going to be a big one. It’s also going to hit those that can least afford it. It’s going to result in massive
amounts of foreclosures. It’s going to result in countless cases of elderly persons being displaced
from their homes. The worst part is, it’s absolutely avoidable but I don’t believe any legislator would
ever have the courage to float a bill to save the pending disaster.
I was at a meeting last night in a 55 and over condominium. Elderly owners were complaining that the pipes are getting
old, there are leaks, and they sometimes have to come out of pocket a few hundred bucks in order to clean up the mess in their unit
and/or repair that broken pipe. They are complaining about bills for a few hundred bucks and find it difficult to pay them because
their sole income is social security.
To state the obvious, there is no reserve account. There never will be. Generally, senior citizens don’t believe in reserving
funds for repairs that may be necessary a decade or two from now because they believe they won’t be here anyway. So, year after
year goes by, decade after decade goes by and there is never a reserve fund to fall back on should a major repair become necessary.
Think of how much building has gone on in the past 50 years. It is staggering. But the buildings are getting older. As the buildings
start to approach the 40 year mark or more, things start to break down and repairs become unavoidable. Concrete restoration is
incredibly expensive, and unavoidable. Replacement of pipes is incredibly expensive, and unavoidable. And the same goes for
electrical renovations and roof replacements. All unavoidable. Yet, so many people, especially seniors, are rolling the dice thinking
that none of these repairs will be necessary while they own the property. That may be true for now, but eventually, everyone rolls
a 7.
Like it or not, some form of reserves should be mandatory
and not subject to being waived. There, I said it. Let’s get rid of the
“life expectancy” formula the state says you should follow but nobody
does. It’s a joke anyway. We all know the truth that the life
expectancy of the roof somehow gets longer, the closer you get to the
original estimate of how long it was going to last. Five years ago it
had a five year life expectancy. Money is tight, so today it has a new
10 year life expectancy. Somehow, like fine wine, the roof got better
with age. We all know that happens, and it happens every day. So
how about we make things simple. Let’s just say every condominium
must contribute 10% of its annual budget to reserves for roof,
plumbing, electrical, structural and painting. It all goes into one pot
and it can be used for any repair necessary for those categories. It
can’t be waived. If however an association wants to contribute more,
they can.
If we implemented this, I’m guessing the average monthly
increase for most condominiums that are not already reserving funds
would be anywhere from $25.00 to $75.00 per month per unit. I know
that for some that increase is not easy. However, it’s going to be a lot
more expensive if any one of these inevitable repairs become
necessary and it’s time to pass a special assessment in the thousands
or tens of thousands of dollars. What do you think?

 

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