There are people living in an identical tower right next door who insist they’re not going anywhere are you kidding?
The thing to remember is the board is all volunteers who happen to live there. They don’t need to have skills on engineering, finance or management.
As the president of my board for years the skill level of members varies widely.
Rationally, I think I should feel OK as long as my building doesn’t have exposed rebar as seen in this pictures. As an actual human, however, I’m sure I would retreat to an AirBnB ranch house
Wat
The building on the far right is Champlain Towers north I think. Basically identical, built at the same time, same company.
From looking around, it appears that it is recommended that the reserve fund should be around 10% of the annual operating budget. Let’s assume the HOA fee is $1000/month and $100 of that goes into the reserve fund, and that there are 140 units in the building. The cost of fixing the problem was reported as possibly $15 million.
If the reserve fund was used for nothing else, it would take over 1000 months, or almost 90 years, in fees for the reserve fund to have enough money to pay for repairs.
My guess is that a properly maintained emergency fund wouldn’t come close to having enough money to pay for major repairs (because it would only have $1-2 million) and that a special assessment is the only way to go about paying for a fix.
No, I knew that there were similar/identical towers still standing, I just assumed they’d been evacuated.
I would guess that a similar engineering assessment was done of the other tower. If it was reported at the time that none of the same problems existed with the other building, I think I would feel okay staying there.
More people die of covid than buildings falling down. They are not living in fear.
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Building collapses have a much higher CFR tho
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They were prepping for a special assessment in the range of several hundred thousand per unit.
And the first payment was due today. I know and I just wanted to push back against anyone who perceived that this was due to a poorly managed reserve fund. Even a properly managed emergency fund would not have been able to handle this. Rather than just asserting, especially since I am not a real estate expert, I wanted to work through the numbers so that someone could correct me if I was wrong.
I’ve looked into buying property and the risk of special assessments is one reason I decided not to be interested in condos, especially in high-rise buildings.
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I’m in a condo resort building in Florida right now, so I feel great. Not in the Miami area, though.
Special assessment and general financial health of the complex is the main reason I’ve stayed on my board for a decade now!
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Does the 10% of annual operating budget as the size of an appropriate reserve fund seem correct from your perspective?
they don’t think they can sell without taking a huge hit
I’m sure this is true. I was more thinking of the immediate decision to stay in your residence or get a hotel/some other alternative. If I lived in the sister building, I’d be out until a thorough engineering report.
But hasn’t it also been reported that the issues found in 2018 wouldn’t have put the building at risk?
I live in a coop building, which is similar to a condo in a lot of ways. The building’s almost 100 years old, and we recently had a couple major maintenance expenses: repairs to the roof, and façade inspection/repair, which the city requires every 5 years to make sure bricks don’t fall on pedestrians. These were financed in part through the building’s reserve fund, but also with special assessment as well as refinancing the mortgage on the land (one difference between a coop and a condo is that the coop doesn’t have to own the underlying land). These were major expenses, but not unexpected.
If some big surprise expense came up, then the residents would have to pay it or sell/give up their apartment.
Well, I did find this:
Minutes from a November condo board meeting obtained by The New York Times showed that some maintenance work was underway in hallways, which have been stripped of their baseboards and in some cases remained covered in plastic. The board also discussed a concern about planters near the pool that were leaking into the parking garage below, a problem similar to one of the most serious deficiencies identified in a 2018 engineer’s report about what was causing rebar to rust and concrete to crumble in the South towers.