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There are several important things you need to know about if you are planning on buying a condo in Florida.
Any one of these issues can seriously affect your quality of life as well as your cost of living.
Thus it is important for you to do a lot of research before you buy. If you don't, you could run into some upsetting and financially damaging problems.
I know this because I have lived in a Florida condo for the past 26 years!
Many of the issues this article discusses also apply to condos in other states, so no matter where you plan to buy, make sure to do your homework!
Don't Buy the Hype
If you're planning on buying a condo in Florida, you may want to reconsider.
There are one and a half million units in the state, many of which are making life a living hell for people who thought they were buying a piece of paradise only to find that they are living out their golden years in a quagmire of problems.
For this reason it's important to learn the facts before making your purchase.
The hype is that condos offer you an affordable way of life that relieves you of external maintenance chores while at the same time providing a community of like-minded people who enjoy social activities together.
The reality is that buying into a condo community means
- signing an enforceable contract that holds you accountable to a bevy of nit-picking and sometimes ridiculously stupid rules,
- turning major maintenance and financial decisions over to a board of generally uneducated, unskilled and inept neighbors who have no background or training whatsoever in property management or finance,
- living in close quarters with people, some of whom you will grow to dislike greatly, and
- being forced to spend money on things you do not think you should have to pay for.
Finally, you need to understand that if you have never lived in a condo before, it may be difficult for you to adapt to this lifestyle.
The Legal Ramifications
Many who move into condos do not realize the legal and social ramifications of doing so.
They do not understand (or even want to understand) the concept of communal living.
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They come into their condos happy about no longer having to mow lawns, paint their buildings, clean their pools or worry about their general safety. However, the honeymoon ends as soon as they realize they will have to pay their share of buying somebody else's new roof, even though they may not be getting one themselves.
Furthermore, they are not aware of that if someone becomes injured on the condo property, all residents are equally liable for any damages, the cost of which can run into hundreds of thousands of dollars!
It is human nature to dislike being told what to do, especially when people feel they own their property.
However, for a condo community to function well, everybody living there must adhere to the rules. In fact, people generally must sign agreements to uphold the rules before they are permitted to purchase a unit.
The problem is that many residents sign the agreement, then do whatever they like.
They agree not to have pets, and agree not to park on the grass, but they sneak cats and dogs into their condos and park where they aren't supposed to. These things irritate other residents and cause hard feelings that ruin relationships.
Residents complain to the board when people ignore the rules, but violations are expensive and difficult to enforce.
In extreme cases, rule breakers can be fined, but they must be given a two-week notice and then meet with a “fining committee” and arbitrator to decide whether the fine is justified.This is difficult to arrange, however, because:
- the arbitrator must be a lawyer, who charges the community a hefty hourly sum for conducting the meeting and
- finding residents who are willing to impose fines on their neighbors is almost impossible.
Thus, although consequences are written into the law, they are virtually useless. The end result is that irritated residents either put up with violators or move. Owners are often stuck in costly and upsetting situations from which they cannot afford to extricate themselves!
What most people do not realize is that Florida condominiums are not-for-profit corporations.
Most corporations are run by educated, trained business people who have staffs on call to handle their paperwork.
Condos, on the other hand, are expected to be run by volunteers. These people are often over the age of 55 (sometimes way over), may be highly medicated or otherwise mentally impaired, and may not understand enough English to be able to deal with the legalese in the state laws and condo documents.
These same people will decide how you will live and how much you will have to pay to do so.
New residents feel secure because they have been told that there is a professional management company overseeing the business of the community.
Managers are employed by the board to handle paperwork, provide guidance when needed and serve as a liaison between the association and the company's attorney.
Unfortunately, a management company is only as good as its employees. If they are lax, misappropriate funds or give incorrect advice, they can wreak havoc with the finances of a community.
To quote a well known and highly respected Florida condo attorney, management companies "have morphed into a (excuse the almost comical label) 'profession' populated by HS graduate losers who generally have no business being in the business and for the most part have worse reputations than the moving industry or robo callers (there are exceptions, but few and far between)."
Despite these problems, by law, condo communities are legally required to employ management companies and pay hefty sums to do so.
Furthermore, there is little residents can do to protect themselves against inept or corrupt management companies other than to file suit, which is very expensive to do. (The attorney I quoted above makes $1250 per hour).
When you move into a condominium you become financially linked to all of the other owners in your community.
All of you pay a monthly fee that go into reserves, which are amounts of money set aside to pay for basic property maintenance. Each year many communities votes to fully or partially fund them.
Since full funding costs much more, most communities vote to partially fund. Owners then pay less, but, of course, less money goes into the reserves.
If the community is relatively new, this usually works out OK. If it is older, the board may need more money than what is in the reserves.
To pay the excess, boards can either borrow money or charge each unit owner a fee called an assessment. Boards usually choose to assess because it is less expensive than borrowing.
How Big Assessments Destroy Communities
When assessments go too high, there are always owners who cannot afford to pay them.
When this happens, some are able to sell, even if they have to do so at a loss, but the others eventually lose their homes.
Communities hire attorneys to handle the inevitable foreclosures, but their fees add significantly to the financial burdens of the remaining owners. Furthermore, they must also pay any monies that normally would have been paid by the people who lost their homes.
These extra costs can cause a second round of foreclosures, which then cause another round of increased costs for residents.
If this situation continues long enough, the entire community terminates, and everyone loses either their home or a good deal of money.
These things can happen in any condo community, and are the very issues that make buying a condo so risky, especially in a transient area such as Florida.
Florida Laws Make Buying Condos Risky
In recent years the State of Florida has passed laws that allow developers to take over condo properties at pennies on the dollar.
The attached videos give excellent explanations of the types of things that have been happening, but the bottom line is that these laws are forcing owners to lose hundreds of thousands of dollars simply because the state has pulled the financial rug out from under them.
Many are senior citizens who have invested their life savings into their homes and owe far more than what they'll be paid when they're forced to move.
This not only will bankrupt many of them, but also will leave them homeless.
This is due to just one of the laws the state has passed that bring real financial harm to Florida Condo Owners, but there are others that are equally harmful.
Don't Rely on Investigators
There are one and a half million condos in the state but only 53 investigators to handle the many complaints that come their way.
Most of these investigators have proven themselves to be incompetent and few have any in-depth training that they can use to help residents with even the simplest of problems.
They will be the first to tell you that they have absolutely no authority to do anything other than to accept a complaint, accept a rebuttal from the board and decide who’s right.
If you are right, they send a warning letter to the board. If the board is right, you might possibly be forced to pay any legal fees incurred by the board due to your complaint!
It’s a biased situation that favors boards and leaves residents with frustration, upset and worry.
Consider Carefully Before Buying
The next time you start thinking about drinking a beer and basking in the Florida sun while watching workers mow your lawn and tend to your flower beds, you might want to consider that because of the way Florida is doing things, buying a condo here might force you into bankruptcy in the future.
At the very least, it may make your life miserable.
For these reasons, I would advise you to do plenty of research before you make your decision.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Questions & Answers
Question: How do property taxes work in Florida?
Answer: When you live in a condo, you own a percentage share of the communal property as well as everything from the drywall in. Therefore, you pay taxes based on the land and the buildings, but not on the interior of your unit.
Question: Why do the association fee and special assessment fee cost more for the larger condo units if you own it?
Answer: Amounts are based on square footage. So if you own a larger unit, you pay more and vice versa. You can find the percentages in your documents.
Question: Do you need an agent to purchase a condo?
Answer: No, but it's a good idea to have one. A condo is real estate, the same way a house is, and there are many issues that an agent can help you with that if not taken care of can present problems later.
Question: Can you rent out a Florida condo?
Answer: That depends on what your documents allow. In many cases you can, but not always. This is why you should read documents carefully before buying.
© 2017 Sondra Rochelle
Sondra Rochelle (author) from USA on February 28, 2020:
A majority vote of the membership can remove any board member. Boards have a lot of power. Thinking they are wrong is not enough, and hiring a lawyer is costly and often ends up with the challenger losing the battle. Your choices basically are to just accept the situation, get enough owners to jointly hire a lawyer to go after the board or move. Moving will be the easiest.
vic on February 28, 2020:
What do you do when a Chairperson controls the board members to vote the way of chair ?
How to challenge the board if you think they are wrong with out hiring a lawyer
Sondra Rochelle (author) from USA on December 29, 2019:
Neither is a good choice. You'd be better off to rent a small apartment that is reasonably priced. You will be safe, won't have to worry about maintenance and won't have to worry about legal issues. Good Luck.
Maud on December 28, 2019:
Thank you for the advice. I was considering to buy a mobile home ,An real estate agent convinced me to go for a condo. What do you think of this idea I am 70 years od ,single woman . Please advise me and thank you.