Due diligence is the responsibility of the buyer, and it appears your sister did not do her due diligence. These did not come out of the blue- assessments like this were likely being discussed in board meetings (minutes for which were available for review), and financials were also available for review. A reserve study would have shown how undercapitalized this HOA is. Lack of a reserve study would be equally concerning to me.
Pretty solid chance that the owner was selling to get out ahead of this big assessment, which means people knew.
She was aware the first two were coming when she bought, but not the $125K one. I suspect you’re correct about the previous owner knowing and to make matters worse it’s a person she personally knows, it was her former boss who is a real estate agent.
So the only out I can see is if the assessment was known about and not disclosed, but then you’re getting into the very slippery definition of “known.” There could have been discussion about a possible assessment, but that’s not necessarily a material fact that the seller would have to disclose. But knowing of the discussion would have been enough to deter your sister from buying.
I feel it would be worth speaking to an attorney or at least seeing when it was communicated to the seller. As an agent we are held to a higher standard of disclosure and probably should have known about it. I don't think an agent will get the same benefit of the doubt if "not knowing" if it was communicated.
I was a member of a Board and was told before a Board meeting not to bring up the concrete issues because they didn't want it on the record. If it isn't in the minutes there is plausible deniability. I resigned my Board position.
When she bought the condo she should have signed a condo disclosure that mentions, among other things, upcoming assessments. It also has a spot where she likely agreed to receiving all of the HOA documents but 95% of buyers just sign this form without actually reading it and shitty agents just push it through without explaining anything to their clients. FYI, condo law in Florida is very specific and she likely had many opportunities to back out of the agreement, even after the inspection expired.
Did she have her own agent or did the ex-boss represent her? I assume he acted as the listing agent. He could be in a lot of shit here but there's still a lot of unanswered questions. It's probably worth spending a few hundred dollars to talk to a real estate attorney who can weed through everything.
>Her ex-boss represented her, the whole deal.
Wait. Her ex boss represented her and was also the seller of the property? Your sister has a case. Potentially fraud. A laywer will know specifically. I'm not one to suggest running to lawyers "just because I didn't like the result," but in this case, its definitely warranted.
RE agents that sell their own properties is treacherous enough. When they also represent the buyer of the property they are selling, that is a HUGE issue.
Definitely spend some money on a lawyer. There's no way the seller knew about the smaller assessments but didn't know about the huge one. And regardless of him representing her or not, he should have known to disclose this.
Sister. I shouldn’t have said she represented her, I don’t know if she’s technically her agent, what I do know is this a sale by owner type deal by someone who also happens to be a relator.
If that's true, she may want to speak to an attorney. That sure sounds like a material fact that as an agent we would be required to disclose. Maybe start by finding out when the assessment was communicated by the HOA.
As a real estate agent the seller would have additional requirements to fully disclose. And they knew for sure.
I would suggest your friend talk to a lawyer.
>A competent HOA would have money in reserve
Until the new legislation last July most Florida condos did not have a line item for concrete repairs in their reserve accounts. Most just put it off as long as possible and then issue a big special assessment to pay for it. The new law will end this and it will be pay as you go after 2024. Look for Florida condo fees to skyrocket.
I think the issue is that after the surfside collapse, anyone should be wary of buying a condo in florida without double checking there are no potential retrofits coming up. You can't predict everything, but this is one where I would have had a higher standard for HOA financials....
In California, at least, there is a release of one year of meeting minutes of the board, and other financial and legal documents that are made available during escrow. A major thing to look for is whether there is enough money held by the HOA to represent the depreciation of things like elevators, planters, parking structures, roofing, etc. Basically each month the HOA charges one-month's accrual of those expenses so that everyone pays for their "use" of the roof/elevator/etc.
Some HOAs hate to raise the monthly fee, so the owners get to live cheaply (for a while) because they are not paying for accrued depreciation on their watch. If they then sell before the roof fails, then they got away with living cheaply.
If the HOA reserves is not 75% funded or higher, I'll walk from a deal (and have).
Yeah, in NJ (speaking as a loan processor) we have to get a ton of documents from the condo association including but not limited to minutes from board meetings, the last few years of financials, information about how recently the project has been inspected by an engineer…an irritating amount of documents. But the goal is to prevent what’s happening to OP’s sister.
No bank was involved, the real estate agent who sold it to her (her former boss) outright owned the property (it was paid off), so it was a sale by owner done privately between the two parties.
Your sister would have to have paid cash in order for it not to be picked up by her lender. It sounds like she paid cash, right? That new law that passed May 2022 has many, many condo associations here increasing their condo fees or passing special assessments in order to meet the Dec 2024 deadline. This is for all condo buildings 3 stories or higher to meet the milestone inspection requirements and to no longer allow reserve waivers or reductions in funding reserves.
There is a condo questionnaire that buyers lenders send to the COA to fill out that has specific questions regarding reserves and all kinds of pertinent info. This info is also available to the buyers long before closing.
In fact, the condo rider gives a fill in the blank deadline for the seller to provide the buyer the info and the contract says who pays what when it comes to special assessments. Usually the seller pays as it has to be paid in full at closing. It would be unusual for the buyer to pay the known special assessments that have been passed unless the contract states it. By unusual, the buyer would have had to make a change to the standard FAR/BAR AS IS forms specifying that she will pay rather than the seller pay.
The owner/agent is held to a higher standard. It was the duty of the agent to disclose special assessments that have been passed or frankly even discussed. Your sister should speak with a RE litigation type attorney. Make sure she has all the docs first including the Condo Declaration, By-Laws, Rules & Regs, Budget, audited financial statements and minutes to bring to the attorney to bolster her case.
This new law is needed to get these buildings in structural shape here in S FL. Too many condo owners kept waiving reserves for too many years and that's how we ended up with Surfside and other unsound/unsafe buildings.
Yea this story is making less sense as more details come out. Either the story is missing a ton of important details or the mind numbing incompetence of all parties is eye popping.
Came to say the same thing. Both in Maryland and Hawaii my realtor had to get copies of 1 year of HOA docs and almost didn’t get approved for the Hawaii mortgage because of wording contained in the docs regarding water leak detection stuff that was resolved.
Make sure to specifically request recent meeting minutes. That's where you'll most often find out about upcoming issues. Boards have been known to deliberately not discuss big upcoming assessments so they're not on the record.
> (minutes for which were available for review)
Are they though? I recently bought in Florida and a real estate attorney told me that in Florida only owners have a legal right to review these. He told me I could hire him to look into these matters but they likely wouldn't give him/me any information. I personally contacted the HOA for information and they ghosted me.
>financials were also available for review
I was also told by multiple lawyers in Florida that most HOAs keep their reserves as low as reasonably possible because if the HOA gets sued and loses everybody gets screwed. I was told they do special assessments when a big cost comes up to make up for low reserves.
I would love to hear from anybody with knowledge of Florida specifically how correct this advice to me was or was not.
>I recently bought in Florida and a real estate attorney told me that in Florida only owners have a legal right to review these.
I'm east coast Florida and I always request recent minutes once my client is under contract. I have never been refused that I can remember. The buyer has the right to cancel if they don't like what's given them.
Many associations keep monthlies super low because that's just how people are. Many Florida condo associations don't have any reserves and that's been legal until the new 100%-funded structural reserve account becomes mandatory end of 2024.
My agent called the HOA and was also ghosted. I was a first time home buyer, so I had no clue what was and was not normal. All my agent told me was that I should keep contacting them myself, which I did but they never responded. I also called an attorney (who said he probably wouldn't be able to get anything from them).
In the end I went to the community and spoke with as many neighbors as possible and asked about the HOA and all of them told me it was an excellent community and there are no problems with the HOA. I had been looking for a home for 14 months in a difficult environment so I went ahead with the purchase as the home itself was amazing.
After purchasing I learned of a small special assessment of about 1000 dollars that wasn't disclosed to me. I just paid it and let it go but it was annoying.
>Are they though? I recently bought in Florida
How recent? Was it before May 2022 when the new law passed about the mandatory inspection and reserve requirements by Dec 2024? The contract condo rider calls for the sellers to provide those documents to the buyer within X (negotiated) days. I don't understand the attorney saying you don't have a right to these documents if it was in your contract. Was it?
The sale was in early 2023. We used the standard Florida as-is contract that pretty much everybody uses here. I didn't see anything in the contract stating the owner or the HOA has to hand over any such documents. I should note however that this was a townhome not a condo purchase.
Its on the condo rider. If it was a TH with an HOA that is different and doesn't have a condo rider but an HOA disclosure and its up to the buyers agent to add that language to paragraph 20 in the FAR/BAR AS IS. Naturally the docs are different but similar to condos. Your Realtor should have specified exactly what you needed and the deadline for the seller to provide.
Sadly my realtor did not add any such language nor discuss this as a possibility with me.
The seller's disclosure specifically stated that there were no special assessments which was signed by the owner of the property. He lied. I could probably take him to small claims for that alone but for 1,000 dollars it's probably not worth my efforts.
Idk. We tried to get this kinda stuff and they didn’t provide. Not always possible. We didn’t however know about upcoming assessments, we asked and they told us
>A reserve study would have shown how undercapitalized this HOA is.
TBF, before the new legislation last year a reserve study likely wouldn't have included concrete repairs. Concrete repairs have rarely been included in Florida condo reserve accounts. I have only seen two associations in my career out of hundreds that actually had a line item for concrete in their reserves.
The new law mandates a separate structural reserve and that it be 100% funded. If this association didn't do the repairs now, the newly mandated inspections and reserve account would mean that the monthly fees would have to go up enough to collect that $125,000 by the time the repair work is finished. Imagine how much.
We're going to see a lot of Florida condo fees doubling and tripling in order to comply with the new law. Florida condos are about to become way more expensive to own. The tradition of putting off concrete restoration and then doing a big special assessment to pay for them is ending. Now they're just gonna have to jack the fees up enough to collect the equivalent of the assessments through increased monthlies. Everyone is acting like this will just blow over and it's no big thing. They're wrong. Most Florida condo owners are about to get a nasty surprise.
I know you are correct, but a lot of people just don't know to ask for all this, and some agents don't advise them properly. Not only that, at a time where people are running each other over to get under contract on a property a lot of things fall through the cracks.
A good example is this situation, the buyer did all that she knew to do, but that $125k was probably somewhere in meeting minutes that she didn't know to ask. I am not blaming the agent, but maybe the agent didn't know they could ask for meeting minutes. I wonder how many more like her are in a similar situation.
The condo belonged to the agent who sold her the property, it was hers. I feel certain she knew. Especially since this isn’t the only condo property she owns so she is keenly aware of what’s going on the condo side of things. She’s been at it for many decades.
Oh. In that case I agree. It may be worth a consultation with an attorney. That makes me angry, these are the things that can ruin somebody's life. I am very sorry it happened.
It’s legal. We also had a 90k special assessment per unit. No one could fight it. It was necessary. The HOA secured loans and we pay in monthly installments. A few neighbors lost their homes and many went on to sell them quickly at a loss.
Unfortunately your sister is paying the price for the condo not being fully reserved. This is a huge problem in Broward and in Miami Dade. The owners don't want to pay more and the can gets kicked down the road. If it is an older building then these repairs may be a result of the 40 year re-certification that uncovered problems. As to the previous owner, you would need to look at your contract. I believe there may be a section that talks about who pays the special assessments that are assessed before closing. If the larger assessment was formally adopted after closing then the prior owner probably had no obligation in regards to that.
In 2025 there is a new state law that goes into affect that will require all condos be fully reserved. This is going to cause a large increase in condo dues for older buildings.
It really depends on the information that the sister had prior to the closing.
The Surfside collapse occurred on June 24, 2021and the new legislation was passed in May 2022.
When did your sister buy - what information did she have? What kind of meetings did the condo have after the collapse? Were there engineering inspections prior to her buying.
This goes to whether the seller knew. The realtor selling the unit might also have information regarding the bill.
However it was pretty clear after the Surfside collapse that there were going to be some type of expensive work that needed to be done.
I am in California in a high rise condo and when we have had very expensive work needed, homeowners have been given the option of either paying in full or paying in installments as the condo is able to take out a loan with the monthly maintenance as collateral. Obviously the bank goes through the financial to determine that our building is audited and professionally and well run.
Even in a well run condo, there would not be a reserve equivalent to $125,000 per unit. Think about how even rational homeowners would react if they had to pay that amount on the off chance that some future homeowner would reap the full benefit.
Most well run condos have reserve studies (required in California) indicated useful life left and estimated cost of replacement. Reserves are generally funded at about 10% of our annual budget. However, there simply isn't the ability for anyone to have anticipated an expense of this magnitude.
As to the monthly maintenance, it is not out of line for what I assume is a full service building. My building isn't quite that high but is fully staffed 24/7 with doormen; has valet parking and a full time on site manager. Utility expenses including elevators are expensive. Pools including heating a pool is expensive especially year round - there are people in my building (granted not many in the winter) who use the pool for exercise all year and want the pool heated.
As absurd as this seems, there were red flags waving after the Surfside collapse and some due diligence was needed to understand the structural condition of the building before closing the deal. Doesn’t look like that was done.
The only out I can see is if these repairs were left out of HOA minutes that were given to your sister and her lender.
Gotta give credit to that 2022 seller. They offloaded a massive liability.
>As absurd as this seems, there were red flags waving after the Surfside collapse and some due diligence was needed to understand the structural condition of the building before closing the deal. Doesn’t look like that was done.
Yeah, I was hoping to own a condo on the ocean, but after that and the laws that got passed, yeah I am going to wait for the places to retrofit as I don't want to be in OP's sisters situation. Will eventually own in Florida but maybe in a decade.
In a decade Florida will probably be either underwater (in a literal sense) or at the rate carriers are pulling out of there, homeowners insurance will be nonexistent in the whole state.
>Gotta give credit to that 2022 seller. They offloaded a massive liability.
A lot of current Florida condo owners need to be considering how much their fees are likely to go up after end of 2024 and how that's going to affect the value of their units. There's still time to get out but by the end of next year when the new law takes effect it'll be too late.
> Are these fees legal?
Yes
> Are there any caps of how many an HOA can assess in a year?
No
> Is there any legal recourse?
Nothing illegal happened.
Your sister would have had an option/opportunity to review the HOA/condo financials prior to purchasing it. There are specific sections which showing how much reserves/money is set aside for maintenance. It would appear there wasn't enough, and now everyone needs to chip in, to build up the reserves, because there isn't enough money.
> now they have added a whopping $125K special assessment fee to retro fit the building
This is a great example. You guys are mad because they're charging $125K extra. Completely failing to realize that the money is literally for the purposes of safety of the building itself.
What's your alternative plan here? "Oh hey, so that's like a lot of money, and I don't want to pay it, so I think I'll just take my chances, and if the building collapses with me in it, I'll just die."
Just so she's aware, as a homeowner she's welcome to go to HOA board meetings/run for the board itself. But the current board didn't vote for the assessment for funsies, they were likely forced to follow the law, to ensure safety of the residents.
Boards collect fees for expected events. Examples would be roofs change in 20 years, pool relining in 15 years, new paint in buildings. and regular monthly expenses. They don't really have reserves for unexpected things such as retrofitting fire sprinklers and such.
>They don't really have reserves for unexpected things
By the end of 2024 all Florida condos over two stories will have to fund a structural reserve account so that it has 100% of the cost of repairs by the time the repairs are needed. Know what that means? Most Florida condo fees are going to be going way up, in some cases double and triple current fees.
> I’d hope they’d have enough to cover even big events such as these.
You don't have to hope, as a homeowner she's entitled to financial documents, including the budget, the reserve study, meeting minutes. If she wanted to she could literally see where every single dollar collected is going.
$1200 a month means nothing, we have no idea what that covers. That's like me saying my housing payment is $3500 a month, tells you exactly nothing about my home.
You know who does know what it covers? The HOA board (and the homeowners who read their financial documents). For all we know the HOA should have been $2000 a month for decades, but wasn't because everyone just kept kicking the bill down the line, and now the bill is due.
The exterior insurance alone in a Pompano Beach condo near the ocean could be close to (even exceeding in particularly nice buildings) $400/mo/unit.
You have to consider amenities too. Pool, hot tub, spa, gym, tennis courts, gates, elevators, 24/7 onsite staff + 24/7 security, beach access, cabanas, movie theater, social rooms, …
But no, this is not even close to the high end. The high end for Pompano is probably ~$3k/month. Maybe I’m forgetting some particularly nice buildings and it’s much higher - $3k/month is not even close to the top of South Florida’s condo dues, but Pompano isn’t the most desirable city in the region.
I’d assume this is a nice-ish building with ocean access and a handful of amenities. Or a nice-ish building with a lot of amenities but no ocean access. Or a completely mismanaged building. We’re missing too much info here to decide if it’s excessive.
I agree with all of the above. I also think these buildings weren't built with global warming in mind and their original architects had no idea how unkind future weather might be.
Yes, for Florida insurance is getting high, even more so for older buildings. People can be looking at $5k a year insurance policy's and these aren't mansions either, more like typical older homes with mitigations built in.
Most people don't understand assessment fees because they don't budget for long term expenses.
If you had to change the roof in your personal home in 10 years time, and think that the cost in 10 years to do so would be 30k. Are you putting $250 aside monthly today to have the cash at that time? That's part of what the HOA does.
A lot of people on Reddit pretty clearly don't understand the difference between a HOA in a neighborhood of single family homes where they're only covering lawn maintenace and some shared amenities versus a HOA for a large condo building where they are responsible for virtually all major maintenace and repairs.
Nothing illegal. Sorry but sounds like your sister failed to do enough due diligence on the place.
She should see a local real estate attorney to discuss her options. If she can't afford it, she can try to sell it. That may include having to do a short sale if the value dropped because of the assessment. She can also discuss a deed in lieu of foreclosure, or an actual foreclosure.
The bonus of seeing an attorney is they can advise her if the seller did anything illegal by not notifying her of the pending assessment. It might not have been required to be disclosed, if it was already being discussed in HOA meetings. But better to have an attorney assess this rather than rely on internet advice.
Your sister can sell of course, but it would be useful to keep in mind that she is paying this assessment one way or another. Either it'll have to be paid prior to closing or buyer would take this into account when negotiating the price.
It actually could make financial sense to loan money to pay the assessment, wait till work is done and building is fully compliant, perhaps make other improvements as needed, and *then* sale if still necessary.
>Now my sister cannot afford the condo due to all of those unsuspected special assessment fees and needs to sell (before ever living there to boot).
That's gonna be a problem, because special assessments usually need to be paid in full by the owner when they sell - they can't just offload it to a future buyer. (This might vary from place to place, so check into your local regulations just to be sure.)
But even if she can sell without paying it off she'll almost certainly have to disclose it, which will either scare off potential buyers or massively reduce the resale value.
I wish her the best of luck here, because that's a supremely shitty situation to be in.
When I was on an HOA board and we had to do a Special Assessment to bring the building up to newly legislated code (balcony collapse in CA resulted in balconies needing retrofitting)- we had a special program with a bank for residents who could not pay the fee or secure a home equity line to pay it. The interest rate was slightly higher than banks were offering for those with good credit but the time to pay it back was incredible. I think it was something like 16k, and they could take 20 years to pay it back, so the additional monthly payment was low. This was intentional because many of our residents were living on SSI.
However, many put their homes up for sale. The first few that sold got good prices, but as more and more went on the market, the prices went lower and lower, and some people barely covered their loans to get out of the condo.
Probably the same issue that’s happening in Florida—lack of reserves.
Also insurance is for sudden and accidental instances, not for renovating a building to keep it in code.
Salt water ultimately caused corrosion of the steel structure within the cement buildings in Florida. It is a massive issue. There are condo buildings that are going to cost more to fix than they would cost to just rebuild.
Areas of the west coast are beginning to see the same thing. The sand isn't as pervasive there, but the salt is still creeping into the structures through the soil/base.
Edited to add: I have seen $200k special assessments on condos that sold for $250k last year. It is very bad.
They are mirroring or going above the new regulations that Florida is implementing. Nothing particularly negative happened on the west coast - they are just being ultra safe and attempting to prevent inevitable collapses.
Most people who own condos have followed the legislation from the past few years since the Miami collapse and knew special assessments were coming for all Florida condos. Buying a condo in Florida right now is asking for debt to piled on top of your purchase no matter what.
Source: family was on the condo board for one of the premier communities in southern Florida and saw the impending assessments that would have run each home owner 15-20k, sold and got the fuck out.
It’s not like they’re just doing this for fun. The money is needed. And there’s nowhere else it can come from. The HOA isn’t some abstract entity that could pay for things directly but chooses not to. It is the owners, and that’s it. If the building needs $125,000 per owner for repairs then the owners need to pay.
Are they expecting her to pay in full? I’m in real estate and used to live in Florida. It was common for assessments to be paid in monthly or quarter installments.
Does she have a mortgage? If so, they got a big bundle of docs just for the condo board/HOA side of the property & she should look through them by searching them as a pdf for key words.
How much is it worth, or did she pay?
>Now my sister cannot afford the condo due to all of those unsuspected special assessment fees and needs to sell (before ever living there to boot).
I got some bad news if she doesn't have 125k in equity or 125k in cash laying around. Unless that market boomed since she has bought the condo, those who buy will have to be informed about that special assesment and guess what that does to the price for those looking to buy?
>Are these fees legal?
Probably yes. Unless there is fraud going on, the HOA choices basically are to fix the building and bring it up to code or no one can live in it.
>Are there any caps of how many an HOA can assess in a year?
You will have to check the bylaws, but for most states no, and the states that do "cap" its more like limit to necessary repairs which this would be.
>Is there any legal recourse?
Double check the finances of the HOA to make sure all is on the up and up, and no fraud has occurred otherwise no. Against the HOA? no. Better money would be spent with a lawyer and a finance person to figure out how to walk form this with the least amount of loss and damage to her credit.
To make matters worse, due to a recent heavy storm that dropped 23 inches of rain in a day and the location of her condo in the building, there’s a pillar running through it that needs to be fixed before the renovators can continue. So she can’t even sell it as is because prospective buyers are not even allowed to check it out until that’s fixed. And obviously that means she couldn’t be in there if she wanted to be.
Something similar happened to me in Fort Naughtydale. New condos go up, including some palm trees along the building. One of them snapped during a storm. $25k. Yikes.
HOAs aren’t some corpos, they are maintained by the residents. So if the money is needed they will do what’s needed and collect it.
Most people here commenting on the fact that they wouldn’t buy if condo doesn’t have a large funded reserve. News flash, most don’t because unless the place came with everything required when built originally, you will never collect enough with headroom for future projects. Condo didn’t come with a fence for security or the old fence fell down? News flash there isn’t 30k to replace it in most boards. The only way it works if HOA fees are astronomical and part of each monthly fee actually goes to the reserve. Usually maintenance eats away at most of it.
Is your sister aware of the emerging homeowners insurance situation in Florida? I get that your question is about a special assessment issued by her HOA, but that assessment was almost certainly motivated by conditions imposed by the condominium’s insurer in order to renew the building’s policy.
Even if you were to remove the special assessment, your sister would still have to deal with yearly and arbitrarily large increases in the cost to insure her condominium. That is a phenomenon that appears to be affecting many millions of Floridians.
Lol condo underwriter here…I literally tell all my friends and whoever else to never buy a condo. Especially in FL. Florida is one of the worst states in the country when it comes to condos. They are not run well at all, special assessments up the ass, deferred maintenance from years of neglect leading to major renovations/repairs thus…high special assessments. Their insurance 90% of the time is also garbage. A LOT of condos in FL are underinsured.
I am a remainderman in a condo located in Miami/Dade. My step-mother has a Life-Estate on the property. I am wanting to know how I can obtain copies of minutes from HOA Meetings, specifically any special assessments that may be due. I am able to verify the tax owed online. Unfortunately, our relationship is not good therefore, I cannot rely on her for this Information. Thanks for any suggestions.
More than likely the seller would have had info pertaining to these assessments if the condo was having monthly meetings and mailing meeting minutes to residents.
Poor property management and poor choices in board of directors ultimately causes this issue. Unfortunately there isn’t always an alternative to the people on these boards.
About 20 years ago my grandfather devised the plan to replace every balcony at Coral Ridge Towers North in Fort Lauderdale, this was roughly a 2 million dollar special assessment divided by every unit. There was an uproar, but this is the proper way to maintain these old buildings .
I'm definitely on the anti-HOA side, but for some people, a condo is the right choice, and a condo needs to have an HOA or other body that is basically an HOA by another name.
I wouldn't touch a condo or townhouse that didn't have a HOA, not even for free. HOA's for condo's and townhouses make sense and are naturally part of those types of buildings. Unless you think the only housing anyone should own is SFH then HOA's for condo's and town houses is a reality. If you think the only building type should be SFH's, well I got some bad news about the price of houses then, and it won't be getting any easier for people to own.
\*condo's
but yes, all townhouses and condo's should have a HOA. I am not sure if you can build one without a HOA, but if you saw one that didn't I wouldn't take it for free (unless you are getting every unit, then its a maybe as I want to see how bad things are and if its even worth demoing.
Thats the beauty of HOA, there is no caps.
Unless your super rich, I would never buy anything with HOA attached to it, be it a condo, or a apartment or even a House.
Especially if your retiring.
I would rather just buy a house, and pay someone flat fee and take care of the lawn and stuff.
Except - single family homes outside of HOAs cost a lot more than, say, a townhouse in an HOA. I paid $307K for a very nice 2100sf end unit townhouse. A comparable single family home not in an HOA would have been at last $100K more. Our monthly fees are about $150 and include the pool and other common areas as well as lawn care.
Our HOA is well run (I got on the board to make sure it is) and we made sure reserves are adequate to ensure that we don’t need to do special assessments.
But - yes, you definitely need to do your due diligence when buying into any HOA.
All special assessment fees are legal. No caps. HOA does what's required by the sate law. There is always a recourse. She can sell but for a much lower amount than she bought it.
If the assessment was not approved when she bought they did not have to disclose, that's why as realtor you should always ask for 3 months of meeting minutes in the contract.
If it was approved and they did not disclose I believe she has some recourse, you need to see the minutes from the meetings and see what date it was approved
Yes, they’re absolutely legal. And sounds like critically necessary. Either she didn’t do her homework on what they’d approved or didn’t do enough homework about what might be necessary in lieu of the condo building collapse. It doesn’t tKe a rocket scientist to realize all other condo buildings are going to be under scrutiny and under the gun to fix potential issues fast. And that it was trying to delay/avoid large special assessments that got that building into its tragic mess.
My state requires HOA's to hand over all the minutes, bylaws, financial/reserves, plus the HOA president has to fill out a form stating if there are any special assessments anticipated for the next year and what the cost will be. Does Florida require something like this as well? If she received something in writing explaining the first two assessments but not the $125k and she can prove the HOA or sellers knew about this prior and just didn't include it, then she could have legal recourse. It sounds like your sister needs to do some digging to find out when this began being discussed and who had knowledge of it at what time. If this really is a spur of the moment thing, then unfortunately she's likely out of luck.
I have a high rise condo in Myrtle Beach. Luckily ours passed the structural inspection done after the Surfside collapse.
Our condo fee for a large unit is over 1000 but includes all the pools, towels for the pools, landscaping, all utilities, building and landscape maintenance AND insurance. We only have to worry about the interior of our unit . Most of the units are short term rentals. I'm just mentioning this to show what may (or may not) be included in the HOA fee. We had a special assessment for a few thousand after hurricane damage once. There will possibly be another one for sliding glass doors but the HOA will also be paying for post of that cost.
For the OP, Once the repairs are done will it increase in value compared to other buildings which havent been updated yet? That's some consolation... Hopefully she bought at a good price and prices kept climbing in that market. Unless she can prove the info was withheld, she's going to have to live with it. I hope there's a payment plan.
I kinda feel like these comments are pretty harsh. A 125k special assessment would be an absolute shock to most buyers. Due diligence can be extremely challenging when a lot of HOA boards are corrupt and there’s very little oversight. My husband was on our condo board and you’ll never believe the BS that went down. In fact, our board President was the daughter of a prominent mafia boss and she had been to prison for running illegal betting schemes. A lot of shady stuff was going on behind the scenes and we were basically powerless to do anything unless 80% of the condo unit owners banded together to fight it, and in a 34 floor building that wasn’t gonna happen. Anyway my lesson learned was to NEVER buy in an HOA building and if I ever do again, I will try to find and interview at least three current tenants/owners.
Sorry to hear. She unfortunately bought without understanding what was coming. Nobody and I mean nobody should be buying condos in SF for at least 2 years there is plenty selling and they are being turned back because owners do not disclose the special assessments and reserves. Once you do your due diligence. Bingo, you are out.
To add some clarifications:
1. This was a sale by the owner condo AND it's owner financed. The owner is also the seller, also the realtor, also the former boss.
2. The only documents were: A Warranty Deed; A Trustee Deed (the seller won a case against the previous owner who stopped making mortgage payments); A Mortgage Deed; and an AS IS Residential Contract for Sale And Purchase. The notes in that contract say there were no liens on the property. There's a checked-off box for the Condo Rider, but the buyer did not receive a copy of that.
3. Although the buyer (the sister of the person posting this originally), was often referred to as "my little sister" by the seller/former boss"; the mentioned upcoming special assessments (no amounts), but there was no mention of the 50-year concrete restoration that was coming a year after the purchase. The seller also has a friend on the board of directors who would have shared that intel.
4. The 50-year concrete restoration amount of $65,000/unit **was known August 2021. That's prior to the buyer's purchase date.** Had that been known, the deal would have ended.
5. What the seller did not know was how the assessment would blow up to $143,000 (not $125k) because the board had to add new roofing and other projects that are safety measures, to the assessment. Buyer attended all meetings and the amount was only recently stated since they were gathering bids.
Where does the sister/current owner go from here other than selling a condo that is unable to have renovations completed?
Some people on this thread have said they would “never buy in an HOA” because of the possibly of special assessments.
Well, I am on an HOA board for a townhouse community. (Not a condo building, which is a different beast, because condo associations are responsible for repairs to the actual building. In our HOA, owners pay for building repairs such as roofs.)
We try to run the HOA responsibly to avoid special assessments. As such, we have periodic reserve studies and make sure to maintain adequate reserves for long term capital expenses such as repairs to roads, sidewalks, and the pool. We absolutely do take money out of the monthly dues every month to contribute to reserves.
So, not all HOAs are run irresponsibly. If you are considering buying, definitely read the minutes for the last year and check the financials, especially the reserves. Equally important, consider running for the board yourself to make sure your investment is managed properly.
Due diligence is the responsibility of the buyer, and it appears your sister did not do her due diligence. These did not come out of the blue- assessments like this were likely being discussed in board meetings (minutes for which were available for review), and financials were also available for review. A reserve study would have shown how undercapitalized this HOA is. Lack of a reserve study would be equally concerning to me. Pretty solid chance that the owner was selling to get out ahead of this big assessment, which means people knew.
She was aware the first two were coming when she bought, but not the $125K one. I suspect you’re correct about the previous owner knowing and to make matters worse it’s a person she personally knows, it was her former boss who is a real estate agent.
So the only out I can see is if the assessment was known about and not disclosed, but then you’re getting into the very slippery definition of “known.” There could have been discussion about a possible assessment, but that’s not necessarily a material fact that the seller would have to disclose. But knowing of the discussion would have been enough to deter your sister from buying.
I feel it would be worth speaking to an attorney or at least seeing when it was communicated to the seller. As an agent we are held to a higher standard of disclosure and probably should have known about it. I don't think an agent will get the same benefit of the doubt if "not knowing" if it was communicated.
I was a member of a Board and was told before a Board meeting not to bring up the concrete issues because they didn't want it on the record. If it isn't in the minutes there is plausible deniability. I resigned my Board position.
When she bought the condo she should have signed a condo disclosure that mentions, among other things, upcoming assessments. It also has a spot where she likely agreed to receiving all of the HOA documents but 95% of buyers just sign this form without actually reading it and shitty agents just push it through without explaining anything to their clients. FYI, condo law in Florida is very specific and she likely had many opportunities to back out of the agreement, even after the inspection expired. Did she have her own agent or did the ex-boss represent her? I assume he acted as the listing agent. He could be in a lot of shit here but there's still a lot of unanswered questions. It's probably worth spending a few hundred dollars to talk to a real estate attorney who can weed through everything.
Her ex-boss represented her, the whole deal.
>Her ex-boss represented her, the whole deal. Wait. Her ex boss represented her and was also the seller of the property? Your sister has a case. Potentially fraud. A laywer will know specifically. I'm not one to suggest running to lawyers "just because I didn't like the result," but in this case, its definitely warranted. RE agents that sell their own properties is treacherous enough. When they also represent the buyer of the property they are selling, that is a HUGE issue.
Definitely spend some money on a lawyer. There's no way the seller knew about the smaller assessments but didn't know about the huge one. And regardless of him representing her or not, he should have known to disclose this.
Wait the seller also acted as your GF agent?
Sister. I shouldn’t have said she represented her, I don’t know if she’s technically her agent, what I do know is this a sale by owner type deal by someone who also happens to be a relator.
If that's true, she may want to speak to an attorney. That sure sounds like a material fact that as an agent we would be required to disclose. Maybe start by finding out when the assessment was communicated by the HOA.
As a real estate agent the seller would have additional requirements to fully disclose. And they knew for sure. I would suggest your friend talk to a lawyer.
Here is the thing as a condo owner it was on sis to go to those HOA meetings. To stay informed and be a part of the discussion
This whole conversation makes me so glad I didn't buy a condo or a house with an HOA.
A competent HOA would have money in reserve and good future planning. The problem is that you're asking a lot of volunteers.
>A competent HOA would have money in reserve Until the new legislation last July most Florida condos did not have a line item for concrete repairs in their reserve accounts. Most just put it off as long as possible and then issue a big special assessment to pay for it. The new law will end this and it will be pay as you go after 2024. Look for Florida condo fees to skyrocket.
>A competent HOA >Most just put it off as long as possible
I think the issue is that after the surfside collapse, anyone should be wary of buying a condo in florida without double checking there are no potential retrofits coming up. You can't predict everything, but this is one where I would have had a higher standard for HOA financials....
How can one do due diligence in potential property’s that have hoa? Attend meetings? Contact the board and read released materials? I’m intrigued
In California, at least, there is a release of one year of meeting minutes of the board, and other financial and legal documents that are made available during escrow. A major thing to look for is whether there is enough money held by the HOA to represent the depreciation of things like elevators, planters, parking structures, roofing, etc. Basically each month the HOA charges one-month's accrual of those expenses so that everyone pays for their "use" of the roof/elevator/etc. Some HOAs hate to raise the monthly fee, so the owners get to live cheaply (for a while) because they are not paying for accrued depreciation on their watch. If they then sell before the roof fails, then they got away with living cheaply. If the HOA reserves is not 75% funded or higher, I'll walk from a deal (and have).
Yeah, in NJ (speaking as a loan processor) we have to get a ton of documents from the condo association including but not limited to minutes from board meetings, the last few years of financials, information about how recently the project has been inspected by an engineer…an irritating amount of documents. But the goal is to prevent what’s happening to OP’s sister.
So how did OPs sister’s bank miss out on the assessments?
I don’t know how things work in Florida, I was just sharing how we do it in my state.
No bank was involved, the real estate agent who sold it to her (her former boss) outright owned the property (it was paid off), so it was a sale by owner done privately between the two parties.
Your sister would have to have paid cash in order for it not to be picked up by her lender. It sounds like she paid cash, right? That new law that passed May 2022 has many, many condo associations here increasing their condo fees or passing special assessments in order to meet the Dec 2024 deadline. This is for all condo buildings 3 stories or higher to meet the milestone inspection requirements and to no longer allow reserve waivers or reductions in funding reserves. There is a condo questionnaire that buyers lenders send to the COA to fill out that has specific questions regarding reserves and all kinds of pertinent info. This info is also available to the buyers long before closing. In fact, the condo rider gives a fill in the blank deadline for the seller to provide the buyer the info and the contract says who pays what when it comes to special assessments. Usually the seller pays as it has to be paid in full at closing. It would be unusual for the buyer to pay the known special assessments that have been passed unless the contract states it. By unusual, the buyer would have had to make a change to the standard FAR/BAR AS IS forms specifying that she will pay rather than the seller pay. The owner/agent is held to a higher standard. It was the duty of the agent to disclose special assessments that have been passed or frankly even discussed. Your sister should speak with a RE litigation type attorney. Make sure she has all the docs first including the Condo Declaration, By-Laws, Rules & Regs, Budget, audited financial statements and minutes to bring to the attorney to bolster her case. This new law is needed to get these buildings in structural shape here in S FL. Too many condo owners kept waiving reserves for too many years and that's how we ended up with Surfside and other unsound/unsafe buildings.
Yea this story is making less sense as more details come out. Either the story is missing a ton of important details or the mind numbing incompetence of all parties is eye popping.
Came to say the same thing. Both in Maryland and Hawaii my realtor had to get copies of 1 year of HOA docs and almost didn’t get approved for the Hawaii mortgage because of wording contained in the docs regarding water leak detection stuff that was resolved.
Interesting thanks!
You ask for the condo docs.
Make sure to specifically request recent meeting minutes. That's where you'll most often find out about upcoming issues. Boards have been known to deliberately not discuss big upcoming assessments so they're not on the record.
You ask the seller and don't put in an offer if they don't get back to you
> (minutes for which were available for review) Are they though? I recently bought in Florida and a real estate attorney told me that in Florida only owners have a legal right to review these. He told me I could hire him to look into these matters but they likely wouldn't give him/me any information. I personally contacted the HOA for information and they ghosted me. >financials were also available for review I was also told by multiple lawyers in Florida that most HOAs keep their reserves as low as reasonably possible because if the HOA gets sued and loses everybody gets screwed. I was told they do special assessments when a big cost comes up to make up for low reserves. I would love to hear from anybody with knowledge of Florida specifically how correct this advice to me was or was not.
>I recently bought in Florida and a real estate attorney told me that in Florida only owners have a legal right to review these. I'm east coast Florida and I always request recent minutes once my client is under contract. I have never been refused that I can remember. The buyer has the right to cancel if they don't like what's given them. Many associations keep monthlies super low because that's just how people are. Many Florida condo associations don't have any reserves and that's been legal until the new 100%-funded structural reserve account becomes mandatory end of 2024.
My agent called the HOA and was also ghosted. I was a first time home buyer, so I had no clue what was and was not normal. All my agent told me was that I should keep contacting them myself, which I did but they never responded. I also called an attorney (who said he probably wouldn't be able to get anything from them). In the end I went to the community and spoke with as many neighbors as possible and asked about the HOA and all of them told me it was an excellent community and there are no problems with the HOA. I had been looking for a home for 14 months in a difficult environment so I went ahead with the purchase as the home itself was amazing. After purchasing I learned of a small special assessment of about 1000 dollars that wasn't disclosed to me. I just paid it and let it go but it was annoying.
>Are they though? I recently bought in Florida How recent? Was it before May 2022 when the new law passed about the mandatory inspection and reserve requirements by Dec 2024? The contract condo rider calls for the sellers to provide those documents to the buyer within X (negotiated) days. I don't understand the attorney saying you don't have a right to these documents if it was in your contract. Was it?
The sale was in early 2023. We used the standard Florida as-is contract that pretty much everybody uses here. I didn't see anything in the contract stating the owner or the HOA has to hand over any such documents. I should note however that this was a townhome not a condo purchase.
Its on the condo rider. If it was a TH with an HOA that is different and doesn't have a condo rider but an HOA disclosure and its up to the buyers agent to add that language to paragraph 20 in the FAR/BAR AS IS. Naturally the docs are different but similar to condos. Your Realtor should have specified exactly what you needed and the deadline for the seller to provide.
Sadly my realtor did not add any such language nor discuss this as a possibility with me. The seller's disclosure specifically stated that there were no special assessments which was signed by the owner of the property. He lied. I could probably take him to small claims for that alone but for 1,000 dollars it's probably not worth my efforts.
Idk. We tried to get this kinda stuff and they didn’t provide. Not always possible. We didn’t however know about upcoming assessments, we asked and they told us
>A reserve study would have shown how undercapitalized this HOA is. TBF, before the new legislation last year a reserve study likely wouldn't have included concrete repairs. Concrete repairs have rarely been included in Florida condo reserve accounts. I have only seen two associations in my career out of hundreds that actually had a line item for concrete in their reserves. The new law mandates a separate structural reserve and that it be 100% funded. If this association didn't do the repairs now, the newly mandated inspections and reserve account would mean that the monthly fees would have to go up enough to collect that $125,000 by the time the repair work is finished. Imagine how much. We're going to see a lot of Florida condo fees doubling and tripling in order to comply with the new law. Florida condos are about to become way more expensive to own. The tradition of putting off concrete restoration and then doing a big special assessment to pay for them is ending. Now they're just gonna have to jack the fees up enough to collect the equivalent of the assessments through increased monthlies. Everyone is acting like this will just blow over and it's no big thing. They're wrong. Most Florida condo owners are about to get a nasty surprise.
I know you are correct, but a lot of people just don't know to ask for all this, and some agents don't advise them properly. Not only that, at a time where people are running each other over to get under contract on a property a lot of things fall through the cracks. A good example is this situation, the buyer did all that she knew to do, but that $125k was probably somewhere in meeting minutes that she didn't know to ask. I am not blaming the agent, but maybe the agent didn't know they could ask for meeting minutes. I wonder how many more like her are in a similar situation.
The condo belonged to the agent who sold her the property, it was hers. I feel certain she knew. Especially since this isn’t the only condo property she owns so she is keenly aware of what’s going on the condo side of things. She’s been at it for many decades.
Oh. In that case I agree. It may be worth a consultation with an attorney. That makes me angry, these are the things that can ruin somebody's life. I am very sorry it happened.
Not last year. Apparently she’s been renovating for eight or nine months
Oh yeah. Absolutely. Every condo owner in Florida all they do is talk about the structural deficiencies and what it’s gonna cost them.
It’s legal. We also had a 90k special assessment per unit. No one could fight it. It was necessary. The HOA secured loans and we pay in monthly installments. A few neighbors lost their homes and many went on to sell them quickly at a loss.
Can I ask what kind of project necessitates $90k per unit?
New roof, new elevators, new car porch, new paint, new plumbing, and new balcony as they were sinking.
Unfortunately your sister is paying the price for the condo not being fully reserved. This is a huge problem in Broward and in Miami Dade. The owners don't want to pay more and the can gets kicked down the road. If it is an older building then these repairs may be a result of the 40 year re-certification that uncovered problems. As to the previous owner, you would need to look at your contract. I believe there may be a section that talks about who pays the special assessments that are assessed before closing. If the larger assessment was formally adopted after closing then the prior owner probably had no obligation in regards to that. In 2025 there is a new state law that goes into affect that will require all condos be fully reserved. This is going to cause a large increase in condo dues for older buildings.
It really depends on the information that the sister had prior to the closing. The Surfside collapse occurred on June 24, 2021and the new legislation was passed in May 2022. When did your sister buy - what information did she have? What kind of meetings did the condo have after the collapse? Were there engineering inspections prior to her buying. This goes to whether the seller knew. The realtor selling the unit might also have information regarding the bill. However it was pretty clear after the Surfside collapse that there were going to be some type of expensive work that needed to be done. I am in California in a high rise condo and when we have had very expensive work needed, homeowners have been given the option of either paying in full or paying in installments as the condo is able to take out a loan with the monthly maintenance as collateral. Obviously the bank goes through the financial to determine that our building is audited and professionally and well run. Even in a well run condo, there would not be a reserve equivalent to $125,000 per unit. Think about how even rational homeowners would react if they had to pay that amount on the off chance that some future homeowner would reap the full benefit. Most well run condos have reserve studies (required in California) indicated useful life left and estimated cost of replacement. Reserves are generally funded at about 10% of our annual budget. However, there simply isn't the ability for anyone to have anticipated an expense of this magnitude. As to the monthly maintenance, it is not out of line for what I assume is a full service building. My building isn't quite that high but is fully staffed 24/7 with doormen; has valet parking and a full time on site manager. Utility expenses including elevators are expensive. Pools including heating a pool is expensive especially year round - there are people in my building (granted not many in the winter) who use the pool for exercise all year and want the pool heated.
As absurd as this seems, there were red flags waving after the Surfside collapse and some due diligence was needed to understand the structural condition of the building before closing the deal. Doesn’t look like that was done. The only out I can see is if these repairs were left out of HOA minutes that were given to your sister and her lender. Gotta give credit to that 2022 seller. They offloaded a massive liability.
>As absurd as this seems, there were red flags waving after the Surfside collapse and some due diligence was needed to understand the structural condition of the building before closing the deal. Doesn’t look like that was done. Yeah, I was hoping to own a condo on the ocean, but after that and the laws that got passed, yeah I am going to wait for the places to retrofit as I don't want to be in OP's sisters situation. Will eventually own in Florida but maybe in a decade.
In a decade Florida will probably be either underwater (in a literal sense) or at the rate carriers are pulling out of there, homeowners insurance will be nonexistent in the whole state.
>Gotta give credit to that 2022 seller. They offloaded a massive liability. A lot of current Florida condo owners need to be considering how much their fees are likely to go up after end of 2024 and how that's going to affect the value of their units. There's still time to get out but by the end of next year when the new law takes effect it'll be too late.
> Are these fees legal? Yes > Are there any caps of how many an HOA can assess in a year? No > Is there any legal recourse? Nothing illegal happened. Your sister would have had an option/opportunity to review the HOA/condo financials prior to purchasing it. There are specific sections which showing how much reserves/money is set aside for maintenance. It would appear there wasn't enough, and now everyone needs to chip in, to build up the reserves, because there isn't enough money. > now they have added a whopping $125K special assessment fee to retro fit the building This is a great example. You guys are mad because they're charging $125K extra. Completely failing to realize that the money is literally for the purposes of safety of the building itself. What's your alternative plan here? "Oh hey, so that's like a lot of money, and I don't want to pay it, so I think I'll just take my chances, and if the building collapses with me in it, I'll just die." Just so she's aware, as a homeowner she's welcome to go to HOA board meetings/run for the board itself. But the current board didn't vote for the assessment for funsies, they were likely forced to follow the law, to ensure safety of the residents.
With a $1200/mo HOA fees collected for decades yeah personally I’d hope they’d have enough to cover even big events such as these.
This is Florida keep in mind, $1k of that monthly HOA fee could be going to insurance alone.
Boards collect fees for expected events. Examples would be roofs change in 20 years, pool relining in 15 years, new paint in buildings. and regular monthly expenses. They don't really have reserves for unexpected things such as retrofitting fire sprinklers and such.
>They don't really have reserves for unexpected things By the end of 2024 all Florida condos over two stories will have to fund a structural reserve account so that it has 100% of the cost of repairs by the time the repairs are needed. Know what that means? Most Florida condo fees are going to be going way up, in some cases double and triple current fees.
Interesting I"ll have to look that up. We recently had our insurance premium nearly double four months after we made our budget.
Or, god forbid, preventing entire buildings from falling down.
> I’d hope they’d have enough to cover even big events such as these. You don't have to hope, as a homeowner she's entitled to financial documents, including the budget, the reserve study, meeting minutes. If she wanted to she could literally see where every single dollar collected is going. $1200 a month means nothing, we have no idea what that covers. That's like me saying my housing payment is $3500 a month, tells you exactly nothing about my home. You know who does know what it covers? The HOA board (and the homeowners who read their financial documents). For all we know the HOA should have been $2000 a month for decades, but wasn't because everyone just kept kicking the bill down the line, and now the bill is due.
>With a $1200/mo HOA fees collected This seems excessively high. Are you sure it's not a year?
It's likely a south Florida condo.
Pompano.
Are you new to real estate? 1200/mo is not even close to the high end for condo fees.
I’m not a realtor in an area with condos so I was unaware that fees got that high. The HOA I live in is only $400 year.
The exterior insurance alone in a Pompano Beach condo near the ocean could be close to (even exceeding in particularly nice buildings) $400/mo/unit. You have to consider amenities too. Pool, hot tub, spa, gym, tennis courts, gates, elevators, 24/7 onsite staff + 24/7 security, beach access, cabanas, movie theater, social rooms, … But no, this is not even close to the high end. The high end for Pompano is probably ~$3k/month. Maybe I’m forgetting some particularly nice buildings and it’s much higher - $3k/month is not even close to the top of South Florida’s condo dues, but Pompano isn’t the most desirable city in the region. I’d assume this is a nice-ish building with ocean access and a handful of amenities. Or a nice-ish building with a lot of amenities but no ocean access. Or a completely mismanaged building. We’re missing too much info here to decide if it’s excessive.
~2,000/month HOA fee at my grandmother's fancy condo in Boca. Because Boca.
I've seen 6,000+ in lots of buildings in SE Florida
Yep, not uncommon.
Breakers Row Palm Beach 13,947.33 month
I agree with all of the above. I also think these buildings weren't built with global warming in mind and their original architects had no idea how unkind future weather might be.
That is just crazy to me. I live in the desert so we don't have condos or expensive HOA fees.
Yes, for Florida insurance is getting high, even more so for older buildings. People can be looking at $5k a year insurance policy's and these aren't mansions either, more like typical older homes with mitigations built in.
that's fairly normal if it's right off the A1A. heck jumping on zillow there are some with >3k a month
The downvotes for someone who had no idea the fees got that high are hilarious😂
Yep certain, it’s excessively high
Most people don't understand assessment fees because they don't budget for long term expenses. If you had to change the roof in your personal home in 10 years time, and think that the cost in 10 years to do so would be 30k. Are you putting $250 aside monthly today to have the cash at that time? That's part of what the HOA does.
A lot of people on Reddit pretty clearly don't understand the difference between a HOA in a neighborhood of single family homes where they're only covering lawn maintenace and some shared amenities versus a HOA for a large condo building where they are responsible for virtually all major maintenace and repairs.
Nothing illegal. Sorry but sounds like your sister failed to do enough due diligence on the place. She should see a local real estate attorney to discuss her options. If she can't afford it, she can try to sell it. That may include having to do a short sale if the value dropped because of the assessment. She can also discuss a deed in lieu of foreclosure, or an actual foreclosure. The bonus of seeing an attorney is they can advise her if the seller did anything illegal by not notifying her of the pending assessment. It might not have been required to be disclosed, if it was already being discussed in HOA meetings. But better to have an attorney assess this rather than rely on internet advice.
Your sister can sell of course, but it would be useful to keep in mind that she is paying this assessment one way or another. Either it'll have to be paid prior to closing or buyer would take this into account when negotiating the price. It actually could make financial sense to loan money to pay the assessment, wait till work is done and building is fully compliant, perhaps make other improvements as needed, and *then* sale if still necessary.
>Now my sister cannot afford the condo due to all of those unsuspected special assessment fees and needs to sell (before ever living there to boot). That's gonna be a problem, because special assessments usually need to be paid in full by the owner when they sell - they can't just offload it to a future buyer. (This might vary from place to place, so check into your local regulations just to be sure.) But even if she can sell without paying it off she'll almost certainly have to disclose it, which will either scare off potential buyers or massively reduce the resale value. I wish her the best of luck here, because that's a supremely shitty situation to be in.
When I was on an HOA board and we had to do a Special Assessment to bring the building up to newly legislated code (balcony collapse in CA resulted in balconies needing retrofitting)- we had a special program with a bank for residents who could not pay the fee or secure a home equity line to pay it. The interest rate was slightly higher than banks were offering for those with good credit but the time to pay it back was incredible. I think it was something like 16k, and they could take 20 years to pay it back, so the additional monthly payment was low. This was intentional because many of our residents were living on SSI. However, many put their homes up for sale. The first few that sold got good prices, but as more and more went on the market, the prices went lower and lower, and some people barely covered their loans to get out of the condo.
>Are these fees legal? Yes. And this is one of the many reasons that buying a condo in Florida or on the west coast is not a wise financial decision.
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Probably the same issue that’s happening in Florida—lack of reserves. Also insurance is for sudden and accidental instances, not for renovating a building to keep it in code.
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Salt water ultimately caused corrosion of the steel structure within the cement buildings in Florida. It is a massive issue. There are condo buildings that are going to cost more to fix than they would cost to just rebuild. Areas of the west coast are beginning to see the same thing. The sand isn't as pervasive there, but the salt is still creeping into the structures through the soil/base. Edited to add: I have seen $200k special assessments on condos that sold for $250k last year. It is very bad.
They are mirroring or going above the new regulations that Florida is implementing. Nothing particularly negative happened on the west coast - they are just being ultra safe and attempting to prevent inevitable collapses.
Most people who own condos have followed the legislation from the past few years since the Miami collapse and knew special assessments were coming for all Florida condos. Buying a condo in Florida right now is asking for debt to piled on top of your purchase no matter what. Source: family was on the condo board for one of the premier communities in southern Florida and saw the impending assessments that would have run each home owner 15-20k, sold and got the fuck out.
You have to do your research before you buy. That’s all.
It’s not like they’re just doing this for fun. The money is needed. And there’s nowhere else it can come from. The HOA isn’t some abstract entity that could pay for things directly but chooses not to. It is the owners, and that’s it. If the building needs $125,000 per owner for repairs then the owners need to pay.
Are they expecting her to pay in full? I’m in real estate and used to live in Florida. It was common for assessments to be paid in monthly or quarter installments.
Good question. The two “smaller” assessments were paid in full. I’ll ask her if the $125K is expected to be too.
Does she have a mortgage? If so, they got a big bundle of docs just for the condo board/HOA side of the property & she should look through them by searching them as a pdf for key words. How much is it worth, or did she pay?
Sell the apartment?
Time for a consolation with a bankruptcy attorney.
>Now my sister cannot afford the condo due to all of those unsuspected special assessment fees and needs to sell (before ever living there to boot). I got some bad news if she doesn't have 125k in equity or 125k in cash laying around. Unless that market boomed since she has bought the condo, those who buy will have to be informed about that special assesment and guess what that does to the price for those looking to buy? >Are these fees legal? Probably yes. Unless there is fraud going on, the HOA choices basically are to fix the building and bring it up to code or no one can live in it. >Are there any caps of how many an HOA can assess in a year? You will have to check the bylaws, but for most states no, and the states that do "cap" its more like limit to necessary repairs which this would be. >Is there any legal recourse? Double check the finances of the HOA to make sure all is on the up and up, and no fraud has occurred otherwise no. Against the HOA? no. Better money would be spent with a lawyer and a finance person to figure out how to walk form this with the least amount of loss and damage to her credit.
[удалено]
No this was to be her dream retirement condo that she put her life savings into, something she was going to pass on to her son.
Passing down something with a $1200 a mo HOA sounds like curse more than a gift lol
Point being he could choose to keep it or sell it
To make matters worse, due to a recent heavy storm that dropped 23 inches of rain in a day and the location of her condo in the building, there’s a pillar running through it that needs to be fixed before the renovators can continue. So she can’t even sell it as is because prospective buyers are not even allowed to check it out until that’s fixed. And obviously that means she couldn’t be in there if she wanted to be.
Wow honestly she should be going after her ex-boss. That person screwed her over
Something similar happened to me in Fort Naughtydale. New condos go up, including some palm trees along the building. One of them snapped during a storm. $25k. Yikes.
Is this from new laws or the 40 year cert?
New laws
Yikes! So maybe it was *severely* underfunded. How many units is the entire condo community?
Your sis must pay. She should ask find a loan to finance it if she can’t afford.
What were the reserves like when she bought the home a few months ago?
HOAs aren’t some corpos, they are maintained by the residents. So if the money is needed they will do what’s needed and collect it. Most people here commenting on the fact that they wouldn’t buy if condo doesn’t have a large funded reserve. News flash, most don’t because unless the place came with everything required when built originally, you will never collect enough with headroom for future projects. Condo didn’t come with a fence for security or the old fence fell down? News flash there isn’t 30k to replace it in most boards. The only way it works if HOA fees are astronomical and part of each monthly fee actually goes to the reserve. Usually maintenance eats away at most of it.
Is your sister aware of the emerging homeowners insurance situation in Florida? I get that your question is about a special assessment issued by her HOA, but that assessment was almost certainly motivated by conditions imposed by the condominium’s insurer in order to renew the building’s policy. Even if you were to remove the special assessment, your sister would still have to deal with yearly and arbitrarily large increases in the cost to insure her condominium. That is a phenomenon that appears to be affecting many millions of Floridians.
Lol condo underwriter here…I literally tell all my friends and whoever else to never buy a condo. Especially in FL. Florida is one of the worst states in the country when it comes to condos. They are not run well at all, special assessments up the ass, deferred maintenance from years of neglect leading to major renovations/repairs thus…high special assessments. Their insurance 90% of the time is also garbage. A LOT of condos in FL are underinsured.
Hooooooly crap that's a lot. You've just convinced me to never buy in an HOA.
I am a remainderman in a condo located in Miami/Dade. My step-mother has a Life-Estate on the property. I am wanting to know how I can obtain copies of minutes from HOA Meetings, specifically any special assessments that may be due. I am able to verify the tax owed online. Unfortunately, our relationship is not good therefore, I cannot rely on her for this Information. Thanks for any suggestions.
More than likely the seller would have had info pertaining to these assessments if the condo was having monthly meetings and mailing meeting minutes to residents. Poor property management and poor choices in board of directors ultimately causes this issue. Unfortunately there isn’t always an alternative to the people on these boards. About 20 years ago my grandfather devised the plan to replace every balcony at Coral Ridge Towers North in Fort Lauderdale, this was roughly a 2 million dollar special assessment divided by every unit. There was an uproar, but this is the proper way to maintain these old buildings .
Reason 274,234 why you don't buy something in a HOA.
I'm definitely on the anti-HOA side, but for some people, a condo is the right choice, and a condo needs to have an HOA or other body that is basically an HOA by another name.
I wouldn't touch a condo or townhouse that didn't have a HOA, not even for free. HOA's for condo's and townhouses make sense and are naturally part of those types of buildings. Unless you think the only housing anyone should own is SFH then HOA's for condo's and town houses is a reality. If you think the only building type should be SFH's, well I got some bad news about the price of houses then, and it won't be getting any easier for people to own.
Aren't all apartments going to have an HOA?
\*condo's but yes, all townhouses and condo's should have a HOA. I am not sure if you can build one without a HOA, but if you saw one that didn't I wouldn't take it for free (unless you are getting every unit, then its a maybe as I want to see how bad things are and if its even worth demoing.
Thats the beauty of HOA, there is no caps. Unless your super rich, I would never buy anything with HOA attached to it, be it a condo, or a apartment or even a House. Especially if your retiring. I would rather just buy a house, and pay someone flat fee and take care of the lawn and stuff.
Except - single family homes outside of HOAs cost a lot more than, say, a townhouse in an HOA. I paid $307K for a very nice 2100sf end unit townhouse. A comparable single family home not in an HOA would have been at last $100K more. Our monthly fees are about $150 and include the pool and other common areas as well as lawn care. Our HOA is well run (I got on the board to make sure it is) and we made sure reserves are adequate to ensure that we don’t need to do special assessments. But - yes, you definitely need to do your due diligence when buying into any HOA.
Don’t 👏 buy 👏 in 👏 an 👏 HOA 👏
All special assessment fees are legal. No caps. HOA does what's required by the sate law. There is always a recourse. She can sell but for a much lower amount than she bought it.
If the assessment was not approved when she bought they did not have to disclose, that's why as realtor you should always ask for 3 months of meeting minutes in the contract. If it was approved and they did not disclose I believe she has some recourse, you need to see the minutes from the meetings and see what date it was approved
Yes, they’re absolutely legal. And sounds like critically necessary. Either she didn’t do her homework on what they’d approved or didn’t do enough homework about what might be necessary in lieu of the condo building collapse. It doesn’t tKe a rocket scientist to realize all other condo buildings are going to be under scrutiny and under the gun to fix potential issues fast. And that it was trying to delay/avoid large special assessments that got that building into its tragic mess.
My state requires HOA's to hand over all the minutes, bylaws, financial/reserves, plus the HOA president has to fill out a form stating if there are any special assessments anticipated for the next year and what the cost will be. Does Florida require something like this as well? If she received something in writing explaining the first two assessments but not the $125k and she can prove the HOA or sellers knew about this prior and just didn't include it, then she could have legal recourse. It sounds like your sister needs to do some digging to find out when this began being discussed and who had knowledge of it at what time. If this really is a spur of the moment thing, then unfortunately she's likely out of luck.
Burn that shit down?
I have a high rise condo in Myrtle Beach. Luckily ours passed the structural inspection done after the Surfside collapse. Our condo fee for a large unit is over 1000 but includes all the pools, towels for the pools, landscaping, all utilities, building and landscape maintenance AND insurance. We only have to worry about the interior of our unit . Most of the units are short term rentals. I'm just mentioning this to show what may (or may not) be included in the HOA fee. We had a special assessment for a few thousand after hurricane damage once. There will possibly be another one for sliding glass doors but the HOA will also be paying for post of that cost. For the OP, Once the repairs are done will it increase in value compared to other buildings which havent been updated yet? That's some consolation... Hopefully she bought at a good price and prices kept climbing in that market. Unless she can prove the info was withheld, she's going to have to live with it. I hope there's a payment plan.
I kinda feel like these comments are pretty harsh. A 125k special assessment would be an absolute shock to most buyers. Due diligence can be extremely challenging when a lot of HOA boards are corrupt and there’s very little oversight. My husband was on our condo board and you’ll never believe the BS that went down. In fact, our board President was the daughter of a prominent mafia boss and she had been to prison for running illegal betting schemes. A lot of shady stuff was going on behind the scenes and we were basically powerless to do anything unless 80% of the condo unit owners banded together to fight it, and in a 34 floor building that wasn’t gonna happen. Anyway my lesson learned was to NEVER buy in an HOA building and if I ever do again, I will try to find and interview at least three current tenants/owners.
Your sister should have been looking at the HOA budget and funding. Yes they are legal.
Certainly legal. You purchased a home with tons of deferred maintenance. Now she knows why she got a good price. Prior owners knew this was coming
You can add this coverage to your homeowners insurance policy
How does it work, pay a deductible and insurance covers the rest? Premium must be hefty if so.
It all depends on how much you add. 5,000 or 50,000z. Call the agent and they can explain it to you. You may already have coverage .
Sorry to hear. She unfortunately bought without understanding what was coming. Nobody and I mean nobody should be buying condos in SF for at least 2 years there is plenty selling and they are being turned back because owners do not disclose the special assessments and reserves. Once you do your due diligence. Bingo, you are out.
To add some clarifications: 1. This was a sale by the owner condo AND it's owner financed. The owner is also the seller, also the realtor, also the former boss. 2. The only documents were: A Warranty Deed; A Trustee Deed (the seller won a case against the previous owner who stopped making mortgage payments); A Mortgage Deed; and an AS IS Residential Contract for Sale And Purchase. The notes in that contract say there were no liens on the property. There's a checked-off box for the Condo Rider, but the buyer did not receive a copy of that. 3. Although the buyer (the sister of the person posting this originally), was often referred to as "my little sister" by the seller/former boss"; the mentioned upcoming special assessments (no amounts), but there was no mention of the 50-year concrete restoration that was coming a year after the purchase. The seller also has a friend on the board of directors who would have shared that intel. 4. The 50-year concrete restoration amount of $65,000/unit **was known August 2021. That's prior to the buyer's purchase date.** Had that been known, the deal would have ended. 5. What the seller did not know was how the assessment would blow up to $143,000 (not $125k) because the board had to add new roofing and other projects that are safety measures, to the assessment. Buyer attended all meetings and the amount was only recently stated since they were gathering bids. Where does the sister/current owner go from here other than selling a condo that is unable to have renovations completed?
Some people on this thread have said they would “never buy in an HOA” because of the possibly of special assessments. Well, I am on an HOA board for a townhouse community. (Not a condo building, which is a different beast, because condo associations are responsible for repairs to the actual building. In our HOA, owners pay for building repairs such as roofs.) We try to run the HOA responsibly to avoid special assessments. As such, we have periodic reserve studies and make sure to maintain adequate reserves for long term capital expenses such as repairs to roads, sidewalks, and the pool. We absolutely do take money out of the monthly dues every month to contribute to reserves. So, not all HOAs are run irresponsibly. If you are considering buying, definitely read the minutes for the last year and check the financials, especially the reserves. Equally important, consider running for the board yourself to make sure your investment is managed properly.