BEG, STEAL OR BORROW – OR FORECLOSURE?

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?