Jul 2, 2021

Condo Association Assessments

 All condo associations are required to maintain reserves to cover repairs and improvements of common area assets.  So a portion of monthly dues goes into reserves to cover the actuarial life of things like roofs, private streets, club houses etc.  Theoretically, the money is supposed to be there when repairs are needed.  However, what we recently saw with the tragic collapse of a condo building in Florida is that the structure itself needed $15 million in major repairs that were not covered by reserves.  The condo board knew about this problem as early as 2018 and no doubt tried to convince homeowners to vote for a major special assessment. 

Here is where the problem lies.  Generally,  a condo association is limited in the amount it can raise dues each year without a vote of the members.  When these major special assessments come up very often older retired owners will vote NO because they just don't have the money to pay a special assessment.  My guess is that the condo board tried repeatedly to get the votes they needed to get the $15 million to make the repairs.  They apparently eventually must have been successful because the work was supposed to begin in a few months. 

Sadly, is was too late.  The structural issues were so bad that the building collapsed before the repairs could be made.  A 100 plus people are buried in the rubble.  This problem exists all over the country when the need for these major Special Assessments come up.  There probably needs to be some kind of state legislation to deal with this because when significant work must be done to prevent a tragedy, condo boards must have more authority to act.  It is time for action.