For South Florida’s civic and business leaders, the Surfside collapse served as a rallying cry to ensure similar disasters are averted. A bill mandating stricter building inspections and maintenance passed the Florida Legislature during a special session in May, but the arduous work of inspecting and repairing older condominiums must now begin.
For developers, the tragedy resulted in increased scrutiny, but also opportunities. They must be more careful when building now, but the crackdown on condo maintenance will lead to the redevelopment of older buildings.
This comes at a time when condo redevelopment sites are more valuable than ever.
For example, in May, the court auctioned the Champlain Towers South site for $120 million to Dubai, United Emirates-based Damac Properties. It announced plans to build a Cavalli-branded condo there, although the details have yet to be revealed.
That same month, Florida legislators unanimously passed SB 4D, which Gov. Ron DeSantis swiftly signed into law. Starting July 1, all condos and cooperatives that are least 30 years old must be inspected. Those within 3 miles of the coast will undergo inspections at the 25-year mark. Reinspections must occur every 10 years. Prior to this, only Miami-Dade and Broward counties had inspection requirements at 40 years. Additionally, starting Dec. 1, 2024, condo associations can no longer waive the collection of reserves for future building repairs.
Miami-Dade County and Boca Raton also passed stricter building inspection laws.
“Insurance is another major expense that will soar for condo associations and unit owners,” said Regan Marock, senior VP of the Southeast for Dania Beach-based AKAM, which manages 70 condo buildings in Florida. “Insurance carriers are more carefully evaluating the risks in condos and flagging code violations and unfunded maintenance and repairs,” he said.
“If a building has frequent claims for leaks and water damage, insurers will want the association to fix the problem. I have some buildings where the insurance broker says ‘your increase is 50%, and I know it doesn’t seem reasonable, but the building next door is getting a 150% increase,'” Marock said.
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