[VA Yankee]

A lot of posters are commenting about repair, reserves, the Surfside incident but according to the news story the increase is due to Insurance Rate increases that are being felt all over the state, what do they want the board to do allow the insurance to lapse.

I realize that Century Village is a more modest retirement community based on costs to buy a unit (at least when I looked) and for many they just don't have that extra per month. But where is it any different, communities of all price ranges are feeling the effects and it seems like the elected officials aren't doing much to help cap this these rampant increases.

[1insider]

I just heard from a unit owner of a condo in my area that they had to raise monthlies by $150 per unit just to cover the increase in the master policy renewal. Those folks at Century Village are really gonna blow a gasket next year when they find out how much fees are going to have to go up to fund the new structural reserves. The new reality for Florida condo owners is significant fee increases. It hasn't started yet for most condos but it's coming and it ain't pretty.

[BBMW]

Then you have to deal directly with all the costs, at individual rates. There's no such thing as a free lunch.

Originally Posted by Chas863

My advice is to never purchase a place in a community where you have to pay management or HOA fees to some company that runs the place and owns the land.

Instead, look for a place where the homeowners own the land. That way, they can set up an HOA that acts in THEIR best interest, not what is in the best interests of some "for profit" organization.

[Chas863]

Originally Posted by BBMW

Then you have to deal directly with all the costs, at individual rates. There's no such thing as a free lunch.

Apparently, my advice went over your head. If the homeowners DON'T own the land that their homes sit on, then they're at the mercy of the landowner and his manager for land rental increases.

OTOH, if the homeowners DO OWN the land that their homes sit on, then they can hire and fire their management as they see fit. Their property taxes are determined by the county, not some management company that owns the land that their house sits on.

[Ghaati]

Originally Posted by Chas863

Apparently, my advice went over your head. If the homeowners DON'T own the land that their homes sit on, then they're at the mercy of the landowner and his manager for land rental increases.

OTOH, if the homeowners DO OWN the land that their homes sit on, then they can hire and fire their management as they see fit. Their property taxes are determined by the county, not some management company that owns the land that their house sits on.

Private condominium communities are communally owned by the homeowners, but the land is managed by a management company hired to do the management and maintenance. The HOA fee pays for that management, and the management company is absolutely a for-profit entity.

They can't hire and fire their management as they see fit, the company signs on with a contract for a certain period of time at a certain rate. The only time the management company can be fired is if the management company breaches the contract. The contracted relationship can be dissolved at the end of the contract period, but at that point no one is being fired. The contract is simply not being renewed.

Century Village (the community this thread is about) is a private condominium community. Everything I said about it above, applies. Everything you assumed about it - does not.

[Lincolnian]

Originally Posted by kidyankee764

Many cities and towns are also hardening their building codes following what happened in Surfside. I know one building in Fort Lauderdale, which was 40 years old, had a 12k per unit requirement to meet new standards. I know Pembroke Pines is an inland suburb but it’s possible they could have new requirements.

That said, many HOA’s are wholly mismanaged and many border on criminal. I don’t know what the case is here though, so I’ll reserve judgment.

It is a confluence of events, changes in building standards; insurance spikes due to weather events, liability and fraud; and inflationary effects of building supply shortages coupled with other inflationary factors.

I work with contractors every day and they are experiencing significant labor shortages of skilled workers to replace the large numbers of experienced workers who are retiring. This, along with the doubling of many materials in the past 3 years, has significantly affected their rate structure which gets passed on to customers.

Many HOAs, especially ones with significant populations of first-time buyers and retirees of modest incomes, are notorious for deferring critical maintenance items in order to keep HOA increases as low as possible. The same associations are also very sensitive to special assessments. The insurance is a new kicker. There is no way to avoid passing on these increases since the sheer percentage of the increases cannot be absorbed by trimming other budgetary items. Some FL HOAs have seen their commercial packages increase from $250,000 to as much as $750,000 within the past 3 years. Many associations are now faced with no insurance company willing to insure their HOA other than Citizens. The move to Citizens often carries with it a reduction in coverages and increases in deductibles. There is no way to absorb a $500,000 increase without a significant increase to the monthly HOA fee. Along with that the H06 (required homeowner's policies) are facing increases as much as 400% over the same time period so it is a double whammy.

[Ghaati]

Originally Posted by Lincolnian

It is a confluence of events, changes in building standards; insurance spikes due to weather events, liability and fraud; and inflationary effects of building supply shortages coupled with other inflationary factors.

I work with contractors every day and they are experiencing significant labor shortages of skilled workers to replace the large numbers of experienced workers who are retiring. This, along with the doubling of many materials in the past 3 years, has significantly affected their rate structure which gets passed on to customers.

Many HOAs, especially ones with significant populations of first-time buyers and retirees of modest incomes, are notorious for deferring critical maintenance items in order to keep HOA increases as low as possible. The same associations are also very sensitive to special assessments. The insurance is a new kicker. There is no way to avoid passing on these increases since the sheer percentage of the increases cannot be absorbed by trimming other budgetary items. Some FL HOAs have seen their commercial packages increase from $250,000 to as much as $750,000 within the past 3 years. Many associations are now faced with no insurance company willing to insure their HOA other than Citizens. The move to Citizens often carries with it a reduction in coverages and increases in deductibles. There is no way to absorb a $500,000 increase without a significant increase to the monthly HOA fee. Along with that the H06 (required homeowner's policies) are facing increases as much as 400% over the same time period so it is a double whammy.

"Up north" I lived in an HOA with a very tight sense of fiscal responsibility. Our fees could have been just $50/month, but they made it $70/month. And that extra $20/month from each unit went into an interest-bearing escrow account. Once that amount was enough to cover a new roof for every single unit, the increases stopped including that $20. Example: every year it'd go up by $5. So the first year needed to be $50, the second year would be $55, then 60, then 65, and the 5th year was $70. PLUS the $20/unit roof escrow fund. By year 5 we no longer needed to add to the roof escrow fund so in year 6, 7, 8, and 8, our HOA fee didn't go up at all. That absorbed the $20 additional.

And then if we needed capital improvements it'd come from the roof fund, and our increases would start including the extra $20 again.

HOAs and Maintenance fees for communities that don't have HOAs should always have more than they need, to cover capital improvements. That way they don't get stuck with a surprise $10,000/unit assessment for a renovation or replacement that they should have seen coming, but chose to pretend wouldn't ever happen.

[Travelassie]

Originally Posted by jaxrivers

JEEZE. They aren't MISMANAGED, the HOMEOWNERS are the HOA and THEY are irresponsible and vote to NOT FUND the PLACE.

Surfside had no damn reserves!

People have to be stupid to LIVE ON THE OCEAN AND NEVER INSPECT OR MAINTAIN THEIR REBAR.

No doubt that stuff is meaningless to your guys. It means the collapse was THE HOMEOWNERS' FAULT.

Pembroke Pines is in western Broward county. NOT on the ocean. Though it's true the maintenance must be kept up.

[Ladywithafan]

Florida experienced the beginning of the condominium boom in the early 70's which makes many of the associations more than 50 years old. With the exception of Broward and Dade counties, there were no inspections required for associations 30 years and older. The can was just kicked down the road with respect to deferred maintenance.

Milestone studies and SIRS (structural integrity reserve studies) are to be completed by December 31, 2024; all structural reserves must be fully funded after December 31, 2024 as well.

Insurance is now at least half of many associations' operating budgets with legal following a closed second at 15-25%, that doesn't leave whole lot for landscaping, utilities, cable etc. does it?

Association documents have a clause for "termination of condominium" and this may be the only way out of the pyramid scheme.

[wizrap]

A client of mine has a condo on Fort Lauderdale beach. The HOA has already sent out notices to expect a special assessment of anywhere between $70,000 and $80,000. These are million dollar condos. He doesn’t know of anyone who’s selling due to this cost. Apparently the neighbors can afford it.

Also, he said only 4 insurance companies will write condo insurance in the state. I suspect since there’s not a lot of competition, you see increased costs.

The condo housing market is gonna be a-changin’.