Numerous reasons for the rising ownership costs in condominium developments and planned communities have been given lately in the media.  These recently mentioned costs are being attributed to inflation, rising interest rates and increased property management operations expenses.  The fact is many property management companies who provide such services as HOA accounting, reserve study inspections and preparation, and HOA management services have increased their fees significantly over the past few years.  But besides these operational costs, the biggest increased cost stressor to HOA community homeowners and boards involves the physical aspects of building reinforcement, maintenance, inspections, replacement and repairs.  This is due to the recognition of aging buildings and amenities that make up the community that were not previously anticipated in HOA financial planning.

New Laws Bring Additional Reinforcement, Repair and Maintenance Costs to HOA Communities
The recent wide-spread public recognition of aging buildings, balconies, and amenities has brought serious safety concerns to light, and a demand for solutions.  Those safety concerns have given way to new building and community costs and new laws requiring HOA communities to set aside additional monies for building and amenities refurbishing, replacement and reinforcement.  In 2015, when the condo balcony of an aging and poorly maintained condominium building in Berkely, California collapsed suddenly under the weight of partying college students, the California legislature went to work to add new laws to ensure such a tragedy did not happen again.  With the shocking collapse of the 12-floor Champlain Towers South condominium in Surfside Florida on June 24th of 2021, even more focus was brought by the public and lawmakers to include the passing of new, much stricter and costly laws to protect structural building security.  These recently passed laws have placed new responsibilities, liabilities, and demands on community homeowners, HOA boards and HOA professional vendors and service providers, and definitely more costs of HOA community homeownership and governance.

Contractors and Building Professionals Now Under a “Microscope”
In both the Florida and California building tragedies, the collapse of the condominium tower and the balcony occurred suddenly and resulted from overlooked and ignored maintenance and repair requirements.  The neglect caused many casualties and led to new laws and practices.  The neglect also served as a warning to HOA communities across America. 

After the collapses in both instances, teams of engineers and scientists were brought in to collect information on how the respective collapses occurred.  California signed a new law requiring periodic balcony inspections and increased government oversight over construction companies which requires contractors to disclose past felonies and other crimes to state regulators within 90 days. An earlier version of the bill would have required them to disclose settlements stemming from civil lawsuits as well.  The law calls for the California Contractors State License Board (CSLB) to study whether builders should report any settlements or judgments stemming from faulty workmanship. The CSLB will then determine whether receiving legal settlement information on construction defect cases would be useful in their role of protecting the public.

The Florida Legislature passed numerous new condominium laws as well bringing in new requirements for inspections, reserves and repairs.  For example, beginning in 2025, condominium boards will need to set aside reserve money to cover future repairs.  And the Florida legislature has now put into place statewise inspection requirements of condominium buildings when only a few Florida counties required such inspections previously.

Aging Buildings bring New Responsibilities for Real Estate Agents, Brokers, HOA Management
Sadly, analyzing the “why” of disasters like the ones that occurred in Florida and California after the fact is what is called in the public relations field, “too little too late.”  Structural building security must be investigated upfront by all parties and people involved in HOA community living, and on an on-going basis throughout the life of a building and the community.  Its common sense that a buyers must anticipate additional ownership costs upfront when a home of any kind is purchased.  But with HOA community living, the size of the community could place even more demands on a buyer or homeowner's budget.  Real estate agents and their team of experts must have more in depth and encompassing discussions with their buyers and sellers, HOA board leaders and HOA-related vendors as to the building condition and anticipated costs to keep every valued member of the community and their guests safe in their homes.

Once thought to be a more affordable option to purchasing single family residences (SFR) in non-HOA communities, condominium and planned communities now appear to be more financially demanding than they once were when the communities’ buildings were newer.  Condominium and HOA living once offered a less expensive and more convenient lifestyle that single family homes.  Even though the HOA lifestyle still has much to offer, with aging buildings and amenities and the latest new laws, regulations and requirements, the increased cost of HOA living must now be anticipated and figured into the family budget of buyers, owners and all who live and work in HOA communities.