H
igh-rise condominium owners in Florida are facing a costly reality due to the state's Condo 3.0 law, which has led to surges in HOA fees and maintenance reserves. Developers argue that these increases are necessary to prevent future tragedies like the Surfside building collapse. According to Phil Gutman, President of Gutman Development Marketing, many residents have seen their maintenance costs double, making assessments unaffordable.

    Ian Bruce Eichner, founder of The Continuum Company, notes that there are three competing issues: safety, older buildings, and the Condo 3.0 law's requirement for 90% resident approval to terminate a condominium. Developers like Isaac Toledano, CEO of BH Group, support the law, citing increased inspections and regulations as beneficial for everyone's safety.

    The Condo 3.0 bill, passed by Governor Ron DeSantis in early 2024, dictates new reforms, including building maintenance and condo association governance. The oldest buildings and their residents will likely bear the brunt of costly impending assessments. According to Eichner, any rational person should support the legislation due to its focus on safety.

    Recent data from Redfin shows double-digit increases in condo fees across Florida cities, with Tampa seeing a 16.7% rise and Miami's average median condo cost at $835 per month. In some high-demand markets like Miami, unit owners are required to split special assessments of up to $21 million. Many older buildings may be demolished and rebuilt as newer, luxury real estate projects.

    Toledano notes that the market shift will lead to more transactions of prime real estate, with older units being replaced by new ones. Gutman suggests that some buildings, especially those 50-60 years old, cannot be fixed and should be demolished. He believes that residents in these situations are better off selling their units.

    The Condo 3.0 law requires yearly maintenance and reserve evaluations for buildings three stories or higher. While state lawmakers argue the law will improve building longevity and quality, there are concerns about luxury developers stripping residents of decision-making powers, adding costly fees, and pricing them out of their homes.

    Eichner poses a scenario where a 62-year-old building with $12 million in deferred maintenance faces assessments that its retired or fixed-income owners cannot afford. He fears that hundreds of buildings will face similar issues in the coming years. The developers insist they're there to help concerned residents, offering assistance and recommendations for relocation.