MIAMI – 2/7/2023: For those readers who have been following along with the musings of the HOA Detective™ and his colleagues at the CIDA REPORT™, this story being reported by television station CBS Miami, will not come as a surprise: https://www.cbsnews.com/miami/news/owners-asked-to-pay-thousands-each-toward-40-year-recertification/
If you are not one of the Detective’s long-time followers, please return back with us to those thrilling days of yesteryear before 2010 when the HOA Detective™ and his partners first attempted to raise the bar of awareness regarding the aging U.S. housing stock, which by extension includes an aging inventory of older HOAs.
In particular, the existing housing represented by the inventory of condominium units located in older mid and high-rise buildings, and large expansive planned developments, some of which are the size of small cities and are responsible for maintaining infrastructure that has historically been maintained by city and county governments.
Specifically, the subject of our Tipping Point: 2020 thesis, focused on the aging high-rise condominium inventory in the state of Florida, and even more specifically those buildings that are located within eye-sight of the rising tides and swaying palm trees along the Sunshine State’s coastline.
At that time the message was clear, at least to the collective brain trust, which now forms the nucleus of CIDAnalytics, the CIDA REPORT™, and the CIDA SCORE™
, to wit:
As of 2010 65% of all housing units in the U.S. were at least ten years old. This meant that in ten years (2020) 65% of the housing in the U.S. would be at least 20 years old, or 2 out of 3 houses. This number included both traditional single-family, detached houses, but also attached units such as townhomes, rowhouses, and most importantly condominiums located in mid and high-rise buildings.
Adding to the problem was the fact that many of these aging housing units were actually far older than 20 years of age. An example of this statistical subset was the 136 condominium units located in the now infamous Champlain Towers South in Surfside, FL.
Although unknown by its given name to the Detective and his cohorts back in 2010, the 12-story concrete-reinforced 1981 condominium building, was destined to become the poster child for our Tipping Point thesis, which missed the proclaimed target date of 2020 by a mere 18 months!
Fast-forwarded from June 2021 to Feb 2023, yet another tenet of the Tipping Point argument has been proven to be correct with the announcement that the Palm Bay Yacht Club was planning to levy a special assessment which will result in each of the 235-unit owners having to pay an average of $175,000 for a “…proposed bill for repairs and improvements…”
Perhaps not so surprisingly, the 27-story concrete-reinforced condominium building was completed in 1982, only a year after the construction of the Champlain South Tower, which was located barely 4 miles to the northeast of the Palm Bay Yacht Club until the tragic 2021 collapse.
In the aftermath of the thunderous arrival of Tipping Point in 2021, many Florida condominium associations are certain to be subjected to more scrutiny as a result of building recertification ordinances. Established at the county level, Miami-Dade, Florida’s most populated county, has recertification ordinances in place that date back to 2006.
This recertification process can lead to the owners of high-rise buildings being forced to undertake rigorous structural, mechanical, and electrical inspections when the building reaches 40 years of age. Even more onerous is the requirement that building owners must make repairs based on the consulting engineer’s recommendations, in order to obtain the 40-year certification, which is required in order for the building to be occupied.
In the case of the Palm Bay Yacht Club, the cost of the recommended repairs has been reported to be as much as $46M. With some naysayers already arguing that the final price tag for the Club’s 40-Year Certification could exceed the market value of the 235, 42-year-old condominium units, it remains to be seen how the state of Florida will deal with this new and emerging house crisis.
– HOA Detective™
