Facing Skyrocketing Bills, South Florida Condo Owners Are Now Knocking On Developers' Doors

Condo owners across South Florida aren’t waiting for developers anymore — they’re knocking on doors themselves, asking for buyouts.

A 2022 law forcing older buildings through strict recertifications has left associations drowning in repair bills and declining values.

And with a Dec. 31 deadline to fully fund reserves bearing down, more owners are turning to developers as their only exit.

“The momentum has certainly been towards finding a way to sell their units, obtain profit, whether it's at market or even above market, and then escape … construction work in these buildings and special assessments,” said Dan Marinberg, a broker and attorney who owns Condobuyout.com.

The trend has accelerated over the past nine months, said Omar Morales, a director in Berkadia’s investment sales group.

“Once the condo unit owners see what their new HOA bill is and it's gone from $800 a month to $2K a month, whether they live in the unit or it's an investment property, they rent out,” Morales said.

“Once those costs become more real, they start to be more willing to reach out to my team or reach out to developers directly to try to solicit developers to buy the building.”

After the Surfside condo collapse killed 98 residents in 2021, Gov. Ron DeSantis signed Senate Bill 4-D the next year. The law requires condo buildings at least 30 years old and three stories or taller to undergo structural inspections every 10 years and to maintain reserve funds by the end of 2024.

The law pushed many older buildings into a financial “doom loop,” which means multimillion-dollar repair bills, plunging values and soaring association fees and insurance premiums.

On top of that, Fannie Mae is increasingly blacklisting aging units from loan backing, and Florida engineers — critical for inspections — are steering clear of recertification and repair work over litigation and liability fears.

Developers have also grown wary of condo terminations amid unclear legal standards, some requiring nearly unanimous owner approval, raising the risk of drawn-out litigation.

In June, DeSantis signed House Bill 913, which extended the reserve study deadline to Dec. 31 and allowed associations to tap loans or credit lines for reserves.

But the extension didn’t erase the costs, leaving many owners still struggling to stay in their buildings.

“Even though there's some relief, it's not a big solution for owners of units and buildings that are just beyond repair,” Berger Singerman partner Katherine Amador said.

“There are buildings that are just at a state where, even though we have this legislation now and there's a little bit of assistance here and pausing and delaying, they're just still looking at an immense amount of assessments in the future.”

Many associations missed the 2024 study deadline, but they are now starting to catch up as they move ahead with required repairs and maintenance, said Lindsey Lehr, a shareholder at Siegfried Rivera.

Once inspections are done, at a cost of at least $35K, the assessments start rolling in. That is when associations more often begin exploring other options, lawyers and brokers told Bisnow.

“I even have buildings that have undertaken repairs and still have future repairs. … They’ve spent millions of dollars, and they’re still wanting a termination because the costs are so high and the money being offered is significant,” said Lehr, who represents community associations and developers in condo buyout deals.

But securing a developer isn’t easy. Buyouts can take one to three years, and developers have become more disciplined on pricing and underwriting, Marinberg said.

“I think everybody needs to keep that in mind and remember that not every single project is one that's necessarily going to be attractive to developers and kind of single-purpose buyers,” he said. 

Marinberg brokered the $120M buyout of the 238-unit Bay Garden Manor to JDS Development and Terra Group. As both broker and owner of five units, he rallied neighbors to explore buyout options in 2023, he told Bisnow.

He is now working on about 10 other buyout deals across Miami-Dade County, he said. But with only so many developers ready to buy, expectations need to come down as more associations test the market.

Many associations are basing offers on prices developers were paying in 2021 and 2022, when appetite was stronger. Now, with more opportunities available, some owners are asking nearly double what developers would pay today, Morales said.

“We don’t think there's developer interest to make those expectations. We don’t think that's realistic in today's environment,” Morales said. “We are definitely seeing an uptick in opportunities to work on, but we’re actually being more selective on the ones we take on.”

The only way deals move forward is when condo owners act in unison, Amador said.

“Time really isn't — in most of these situations — it's not on the side of the unit owners,” she said. “From what I've seen and in my experience, when they all come together and here's the price, and it's divvied up and everyone's on the same page, things move a lot faster.”