Jul 17, 2021

Older High Rise Condos - More Inspections

It is safe to say that after the collapse of a 40 year old high rise condo building in Florida and the deaths that followed, values for similar properties have probably plummeted.    No one would buy a condo in a like building without significant inspections, structural analysis etc.  Home owner associations would be wise to get engineering reports and quickly first to make sure buildings are safe and any remedial work needed is done fast,  but also to make any sales that might otherwise occur even possible.

There is a pretty good chance that lenders will stop lending on purchases in many of these buildings and insurance may be impossible to get without significant assurances that these structures are safe.  To be clear, aside from the tragic deaths that occurred from the collapse of the building in Florida, from a real estate perspective,  it has created one big mess. 

Buildings in Florida built after Hurricane Andrew have been built with standards to withstand a category 5 hurricane.  That means a whole lot more cement block construction, more cement in general and more steel for strength.  These older buildings are just not built to these standards.  My guess is that upon further inspection, many of these buildings will have to be torn down because the remedial expense will just be too great.  That probably leaves lenders holding the bag because people will just walk away and default on their mortgages if condos are uninhabitable.  If that happens, lenders may refuse to do new mortgages on buildings with similar construction.  That will make these condos worthless.  It is clearly a disaster for all concerned.