A growing crisis in South Florida's condo market has intensified, with a surge in listings and soaring homeowner association (HOA) costs. This phenomenon has been attributed to a new state law requiring condominium boards to allocate reserves for repairs and maintenance, which has resulted in a steady increase in the number of active condo listings in Miami-Dade, Broward, and Palm Beach counties.

According to a report, the total number of active condo listings in the region has nearly tripled in the past year. Condo owners are grappling with a significant rise in association fees, which have surged by almost 60% over the last five years. The median monthly condo association fee in Miami-Dade jumped from $567 in 2019 to $900 this year, while in Broward County, it increased from $392 to $613 during the same period.

Ingrid Vassell, a condominium owner from Plantation, expressed her concerns, stating, "I don't know how I'm going to stay here if things keep going up." The mounting HOA fees are compounded by costly assessments required for repairing aging buildings and the skyrocketing insurance costs, exacerbated by powerful hurricanes and storms.

The cause of these escalating costs can be traced back to the passing of a bill by the Florida state legislature in 2022. Under this new law, condominium boards must allocate sufficient reserve funds for major repairs and conduct reserve studies every decade. Additionally, condominium associations are now required to provide inspection reports to owners and commence structural repairs within a year if necessary.

The impetus behind this legislation was the tragic collapse of the Champlain Towers South condo building in Surfside in 2021, resulting in the loss of 98 lives. An engineering report from 2018 had discovered concerning structural issues in the building, including deteriorating support beams and cracks in columns. Delays in addressing these problems were reportedly the result of disputes among condo board members over funding the necessary repairs.

The mounting expenses and financial burden faced by condo owners have led to a notable increase in properties being listed for sale. In the second quarter of this year, there were 20,293 active condo listings in the three major South Florida counties, compared to just 8,497 in the first quarter of last year.

Real estate experts acknowledge the challenges faced by condo owners, attributing the surge in listings to older buildings being forced to comply with updated building codes. Filippo Incorvaia, a Miami-based real estate broker, emphasized the cost implications, stating, "The migration away from older buildings is very real, and costs have become unfathomable for many."

However, alongside these challenges, there is a silver lining for condo owners. The construction of new buildings is on the rise, which will alleviate the need for extensive upkeep. Incorvaia highlighted the positive impact, stating, "Financials are more orderly, and codes are followed more diligently, resulting in a safer end product with fewer surprises. Ultimately, I believe this is a must for our community."

As South Florida grapples with the condo crisis, the impact of the new state legislation, combined with increasing costs, is reshaping the region's real estate landscape. The long-term implications remain uncertain, as condo owners weigh the financial strain against the allure of newer, safer buildings.