Maintenance and Repairs

August 10, 2021 Published by Newfoundland and Labrador Chapter - By Mark Graesser

Thoughts Arising from on the Florida Condo Collapse

From the CCI Newfoundland and Labrador Summer 2021 Condo Chronicle Newsletter

Following the Champlain South tower collapse on June 24, I read numerous articles from the major U.S. papers such as the New York Times and the Washington Post delving into the background and implications of the catastrophe. Probably this outpouring was the greatest amount of attention focussed on the condo housing phenomenon since the first building was constructed under U.S. condominium legislation in 1960. This is somewhat surprising, in light of the fact that there are now 335,000 home owner or community associations, the American equivalent of condo corporations, housing 26% of the population.

The hundreds of readers’ comments were particularly interesting, many referring to their personal experiences on condo boards attempting to promote preventive maintenance and reserve funds in the face of virulent opposition from owners. A few notable points I took away:

• Only ten states require reserve funds. Florida, with the most condos of any, only required this as of a couple of years ago, and a 50% vote by owners is enough to nullify this requirement. Likewise, reserve fund studies or the equivalent, are rarely required. (This is not to say that most condos do not have some advance planning and funding for capital needs; just that it seems to be easy to under-fund for “political” reasons.)
• Acrimony among owners and board members over fees and costs seems to be common. Special assessments are a common touch point. There is a high turnover of boards and managers.
• Average condo fees in the Miami area are around $400 per month, some as low as $250. (But some are much higher.)
• Condo demand is high. Units in Champlain were selling in the $800,000 to $1M range right up to the collapse.

Many articles implied that the deterioration noted at Champlain was causally related to the structural collapse. However, I watched an interview with Allyn Kilsheimer, the very experienced engineer leading the investigation for the city of Surfside. He said he was paying little attention to the reports of cracked concrete, water in the parking garage, etc., saying these were superficial and unlikely to lead to catastrophic failure. His team will be going back to the original design and construction, and looking at geo-technical data, over the months ahead, looking for a key flaw.

Whether or not a bad maintenance and repair history caused this catastrophe, it was a problem many U.S. condos are facing. Many comments suggested that the whole condo model is flawed, because it assumes that owners will take a long-term, cooperative view, whereas “American culture” prioritizes self-interest and “low taxes.”

All in all, I came away grateful to be a director within the Canadian legal framework, among (mostly) sensible Canadian owners and residents!

Mark Graesser has been President of the Five-Nine on Roosevelt Condominium Corporation for many years. He is also a member of the CCI-NL chapter board. He stresses that this is a personal opinion piece, based on impressions from news stories, not rigorous research.