Miami's skyline is shaped by high-rise condos, a major part of the city's housing market, driven by a strong demand for luxury waterfront living. Yet, a closer look at the data from real estate firm Zillow for The Wall Street Journal reveals a stark reality: two-thirds of Miami's condo buildings are over 30 years old.
In a city striving for sleek modernity, waterfront buildings are deteriorating after decades of harsh beachside conditions. Following the 2021 Surfside condo collapse, new laws now require buildings over 30 years old to undergo regular inspections, ensure structural safety, and fund necessary repairs through reserves.
Today, condominium owners' associations (COAs) are shifting the financial burden onto condo owners with extraordinary assessments to renovate aging buildings. These unexpected costs are forcing owners to either pay up, sell, or risk foreclosure — creating an existential crisis for many.
(Courtesy of Stevan J. Pardo)
Stevan J. Pardo, real estate developer, lawyer, and former chair member for the City of Miami Beach Historic Preservation Board.
Numerous reports highlight condo owners' frustration with their associations' lack of transparency in managing finances and engaging the public, tarnishing their reputation for leadership and accountability.
Last month, two buildings at 1060 Brickell Avenue voted out their condo board president, Jacob Kasell, for allegedly undermining proper assessment voting protocols, described a Miami Herald report.
Stevan J. Pardo, a leading authority in Florida construction and corporate hospitality law, explains that condo associations lack sufficient fund reserves because they previously had the option to waive them – a practice now prohibited under new laws.
He adds that under the new law, condominium building reserves must be in place by December 31, 2024. However, associations can request a one-year extension, allowing them until December 31, 2025.
REACHING LOW MARKET VALUE
A condo owner and 20-year resident at the Isola Condominium in Brickell Key, who chose to remain anonymous, said their building faces a $19 million assessment to repair years of neglect on the pool deck and garage, followed by three smaller assessments. Their share of the cost nears $40,000.
Beyond major repairs, the source highlighted that rising assessments and home owner association (HOA) fees are unreasonably high for a building lacking quality amenities and shared spaces. As a result, they are actively trying to sell their unit and leave before costs climb further.
(Paloma Pimentel)
A detailed close-up image highlighting visible signs of aging on the exterior facade of the Isola Condominium Building in Brickell Key.
“For me, it’s not my home anymore, I just want to get out because when it's not one problem, it's another. I left my building this morning, and only one elevator was operating. On my floor, there are two fans right now because there was a water leak in a unit,” they said, emphasizing their dissatisfaction with the management of the building.
“Our party room has been closed for five years; they use it as storage, and we pay for amenities,” they said. “Our business center was stripped of all computers, and our conference room is being used by a roofing company. Are we paying their lease?”
The Isola Condominium Association declined to respond, despite two inquiries from the Biscayne Times seeking comment.
Despite its location on a “luxury island,” their condo unit lags significantly behind market values for the area. They pointed out that a comparable unit in the building recently sold for $320,000 – the same price it was worth when the building was converted to condos 20 years ago.
They listed their unit for $390,000 last month and only got four viewings. Nevertheless, they are determined to move out.
“I'm not going to hold off in selling my unit because we had a 60% increase in our monthly dues last year, and this year, we have a 30% increase on top of the big assessment and future assessments that might come,” they said, adding concerns about leadership accountability and transparency in handling building costs.
(Paloma Pimentel)
High-rise buildings engulf the Brickell Key neighborhood.
“People buy condos based on expected living costs, but many who purchased years ago now face unexpected assessments they cannot afford. If assessments keep rising, condo values will decrease,” said Pardo.
High assessments and HOA fees challenge investors and condo buyers seeking strong returns, as private equity investors must weigh whether these rising costs will enhance an aging building’s value over time by improving its condition or infrastructure, he said.
A new Florida law that was passed in 2024, Statute 718.407, along with other modifications, requires condo associations to provide disclosure to potential buyers, said Pardo. The law also enhances protection for unit owners by requiring associations to obtain a structural reserve integrity report, which determines the necessary reserve amounts, as most condominiums currently lack sufficient reserves.
“The short-term financial pain today will lead to stronger condo values tomorrow. But how do we bridge that gap and manage this unprecedented financial burden?” he said.
MARINERS BAY CONDO BUYOUT
Meanwhile, a 43-year-old waterfront condo building in North Miami is deteriorating, with owners estimating that renovations wouldn’t yield a worthwhile return on investment.
(Mark Sell)
A bayside view of the Mariners Bay building.
The 46 unit owners at Mariners Bay each face over $100,000 in maintenance dues and fees. With unanimous agreement, the condo board secured a buyout offer from a local developer.
“After careful consideration and lots of discussions, filing for termination was the most viable option to protect our investments and secure a better future for the community,” said Laura Galeano, president of Mariners Bay Condominium Association. “One hundred percent of our unit owners have agreed to sell their unit to the developer.”
Liana M. Kozlowski, one in a group of attorneys hired by Mariners Bay Association, explained how the deal hinges on the approval of another project.
“The big picture for the deal is that you have a developer, Continuum Company, willing to come in and buy everyone out and redevelop the property,” she said. “But the entire deal is conditioned on Continuum obtaining certain land use approvals.”
At a NoMi Council meeting on Nov. 26, the project was approved for a height increase from the 115-foot limit to 217 feet for a 22-story residential tower at 1200 North Bayshore Drive. Many residents from Mariners Bay urged the council to approve the development in the public comment period.
(Youtube)
Mariners Bay lawyer Liana M. Kozlowski speaking to North Miami council during a meeting, arguing for the approval of Continuum developers height bonus.
“We don't have the money, we cannot survive as a building, and we've been given a lifeline,” said Robert Dotson, a Mariners Bay resident. “We've all gotten on board [for the condo buyout], which sends a message that this is real, and it needs to happen.”
The next step is site plan approval scheduled for a hearing at a January 2025 NoMi Council meeting.
Kozlowski is focused on working collaboratively with developers to streamline the process and safeguard the building's interests.
“This deal is extremely time-sensitive because they are right up on the deadline for the building’s 40-year recertification, where a massive amount of concrete restoration work needs to be completed,” she said. “If the deal fails, they have to go through that process and shell out the money, which now would be closer to $200,000, including delinquent dues [for its postponement], and that just wouldn't be a return on the investment any longer.”
Kozlowski shared how her law group, Shubin Law Group, is being contacted by more associations grappling with the same issues and want their assistance in finding developers for redevelopment options. They expect to help more buildings, but options are limited according to demand.
“It’s just so building specific, with Mariners Bay, that is a waterfront property, it just made sense from a financial perspective to redevelop,” she said emphasizing how waterfront buildings are in demand and heavily sought after.
When discussing waterfront issues amid the possibility of rising sea levels, Kozlowski points to the county’s updated resiliency codes that mandate more resiliency and sustainability from buildings, which addresses flooding conditions for the long term.
Miami-Dade County has introduced codes and measures to improve structural integrity and sustainability in response to climate change and environmental challenges. These include elevated construction standards to mitigate flood risks and the Sustainable Buildings Ordinance (SBO), which requires county public projects to integrate green building practices from planning through completion.
The county also provides loan assistance to help cover costs associated with special assessments. Through the Condominium Special Assessment Program, condo owners with limited financial resources – such as those in households earning up to 140% of the Area Median Income – may qualify for a zero-interest loan.
Despite many issues, Pardo believes that there are pros as well as cons that come with assessments.
"I think it's a good thing that they are maintaining buildings and making sure that they're keeping up with the recertification process” said Pardo. “These are all positive measures that are needed, but they're hitting all at once. And a lot of power is being given to the condominium association boards there."