By now, we are all well aware of the detrimental effects the downturn in Florida's economy has had on the housing market: Rapidly decreasing property values and swiftly increasing foreclosure proceedings.
A residual effect of the economic downturn can be seen in the number of condominium associations that foregoing necessary safety upgrades to their buildings, simply because they cannot afford the upgrades. A recent article in the Sun Sentinel, entitled "Can Florida Condominium Associations Afford Fire Safety Upgrades?" (March 23, 2010) expounds on this phenomenon that forces condominium associations to install upgrades (for many, this would lead to insolvency) or continue to live in buildings with out-of-compliance fire safety systems.
Legislators are hearing the pleas from condominium associations, and in response, a bill has been proposed which extends the time period for condominium's to reach compliance by five years; Instead of facing fines for noncompliance by 2014, the bill proposes to extend the deadline to 2019, or, in some cases, to eliminate the deadline completely.
Individuals investing in condominiums should investigate whether the building is in compliance with fire safety regulations, determine when the building is scheduled for its next upgrade, and if the association has enough reserves to pay for an upgrade. Otherwise, they may face an assessment to pay for the work which can eat into or eliminate investment returns. Condominium investors should closely watch the legislature as the recent bill begins negotiations.
If you would like more information about this topic, you can post a comment to this blog, contact me, Larry Tolchinsky, a Florida Real Estate Attorney, by email, or call me at (954) 458-8655, and I will be happy to answer your questions. I offer a free initial consultation.
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