“Anyone who has dealt with condominium boards knows that they are often filled with cheap, useless @ssholes.”
Years ago I bought a new condo in a building similar to the one that recently collapsed. I soon discovered Florida law did not require homeowner’s associations to accumulate reserves. The developer, who controlled the association until the units were sold, elected not to set dues high enough to accumulate reserves for future repairs to the infrastructure. When the developer turned over the building a vote of the homeowners was held and the members also chose not to accumulate reserves. As one 70+ year old told me — I won’t be here when repairs have to be made, so why should I pay?
If journalism wasn’t dead in this country an enterprising investigative reporter should be determining if required maintenance was not undertaken because the homeowner’s association had not accumulated reserves and the board did not want to assess the owners thousands of dollars each for expensive repairs due to deferred maintenance.
It is insanity not accumulate reserves on condo buildings worth tens of millions of dollars which are constantly exposed to extensive water and wind weathering. In my building reproofing was a $120,000 expense, elevator banks were $100,000 each, and painting the building cost over $60,000.
The state should require condo boards to accumulate reserves. However, developers control the state legislature and developers don’t want to be paying in reserves for unsold units during the 3-5 years it takes to sell out a large building Senior citizens buying into new buildings want to minimize dues payments, assuming they will be gone by the time the big maintenance bills, and associated assessments, are incurred.
There is a significant cost of poor legislation and management of properties. In this case, the cost may have been lives in addition to dollars.
I believe HOA was 1300 a month.
I do some work with attorneys who have a lot of experience in condominium law. One of them told me about a situation where a condo owner sued the association board and claimed that the financial records he had received were inaccurate and incomplete. What made the lawsuit ludicrous was that he had been given those records before he even bought his condo in the building ... which meant the guy simply didn't do any kind of due diligence before buying into the building and was trying to get out of a bad financial situation. The judge laughed his lawyer out of the courtroom on that one by pointing out that the guy had no standing to sue because he failed to take even the simplest steps necessary to cover his own ass.
This same lawyer told me that there are some cases where a condo owner has legitimate grounds to sue on the basis of insufficient capital reserves. The most common situation is one where a condo owner can't refinance a mortgage because the mortgage lender flags the insufficient reserves as a potential risk and does not want to underwrite a loan on the property. This is a case where actual, tangible harm can be demonstrated by the condo owner.