New Florida Law Roils Its Condo Market Three Years After Surfside Collapse

More units are being dumped on the market because of six-figure special assessments tied to repairs for older buildings

By Deborah Acosta of The WSJ. Excerpts:

"thanks to a new law in response to the partial collapse of a building in Surfside that killed 98 people, apartment owners are dumping their units on the market because they can’t afford the six-figure special assessments.

Condo inventory for sale in South Florida has more than doubled since the first quarter of last year, to more than 18,000 units. While the sharp rise in Florida home insurance costs is driving some to sell, most of the units on the market are in buildings 30 years or older. Under the new law, buildings must pass milestone structural inspections no later than 30 years after they are built. Under the new law, buildings must pass milestone structural inspections no later than 30 years after they are built.

In Miami, about 38% of the housing stock is condos, the highest of any major metropolitan area in the U.S., according to Zillow. Of those buildings, nearly three-quarters are at least 30 years old. For those that have large repairs looming, many owners are scrambling to sell before Jan. 1 when building reserves must be fully funded to be in compliance with the law."

"Owners are struggling to find all-cash buyers because mortgage lenders are increasingly unwilling to take on the risk associated with these units."