owners and demolish the building, because the land may ultimately be worth more than the compro- mised structure. Owners who may have paid $50,000 for their condo 20 years ago may now collect on equity that has grown substantially. Although the property with major issues is not worth as much as it may have been before the legislation passed and the inspection completed, sellers may still cash in on their equity and use it to move to a secure home with fewer unanswered questions. It is estimated that around 28,000 condo associations in Florida may be affected by this legislation. This story is still evolving, and it is expected the legislature will further tweak how the inspections are performed and the timeline for repairs. The Florida legislature’s regular session this year is from April 10 to June 8. No one wants a Champlain Towers repeat, and savvy investors know that when the rules change, the change creates opportunity. Re- placing buildings that are no longer sound with structures that are built to today’s codes and standards may usher in safer homes and invest- ments across Florida. Like the floors in a multistory condo building, there are layers to this story and the resulting legisla- tion—with viewpoints that may be hopeful, sad, pessimistic, or forward thinking. Regardless, the new law is meant to protect people in their high-story homes from disaster that can occur when maintenance is not performed. How one feels about the future of condos in Florida primarily depends on their interests. • Susan Reilly is a commercial real estate investment specialist with Berkshire Hathaway Florida Properties Group. She specializes in multifamily properties across central Florida, from Tampa to Orlando. Email comments or questions to sreilly@bhhsflpg.com.
sellers of the adage, “Disclose, Disclose, Disclose.” Disclosure of the special assessments looming will hurt the sales price, but it is preferable to being sued later for not mentioning it. INVESTMENT POTENTIAL? Investors may look for investment opportunities in condo buildings where a great number of units are for sale. A multitude of properties for sale within one association may indicate condo owners believe their condo is headed toward higher assessments because of soon to-be uncovered issues, and they may sell at a discount to get out. Or, if the inspections have already been performed and building issues exist, sellers may be looking to cut their losses and exit. In this case, investment opportunities may exist. In both situations, investors must
take great care in understanding their future assessment charges. Real estate attorney David Reider of Berlin Patten Ebling Attorneys at Law says investors should perform in-depth due diligence when buying Florida condos falling under the new law. He says, “Be sure to look at condo minutes and read the man- datory inspection report. Also ask for financials and proof of reserve funding.” Sometimes the inspection report may be available online with large associations; if it’s not, the buyer’s agent may attain the report when under contract. It may also be possible that old condo buildings in prime locations may have associations that believe the costs are too great to bear. In these instances, the association may elect to disband through the legal process. This disbanding might be a prime opportunity for investors seeking to buy out the individual
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