Condo owners in South Florida are increasingly selling their properties due to significant financial burdens from special assessments and rising fees. These assessments are often necessary to fund extensive repairs and maintenance required by stricter safety standards implemented after the tragic Surfside condo collapse in 2021. This incident led to more frequent inspections and higher reserve requirements for buildings.
Owners who invested heavily in their units, are now facing six-figure assessments. For example, the Cricket Club condominium proposed a $30 million special assessment, amounting to over $134,000 per unit, to cover critical repairs such as roof replacement and facade waterproofing.
The financial strain has doubled the condo inventory for sale in South Florida since early 2023, now exceeding 18,000 units. Many owners, unable to afford these additional costs, are losing their properties. Ivan Rodriguez, who bought his condo for $190,000 in 2019, sold it for just $110,000 after being unable to meet the assessment fees.
This situation reflects a broader trend of rising costs and the financial challenges faced by condo owners, making it increasingly difficult to maintain or sell their properties without incurring significant losses.
Solution Offered Through Loss Assessment Insurance
Loss assessment insurance is a type of coverage that condo owners can add to their condo insurance policy. It helps protect against financial burdens from special assessments their condominium association levied. These assessments can arise from losses or damages to common areas that the association's master policy doesn't fully cover. Here are some key points about loss assessment insurance:
Coverage
- Common Area Damage: Covers a portion of the cost if common areas like roofs, lobbies, or swimming pools are damaged and the cost exceeds the association’s master policy coverage.
- Liability: Helps pay for legal liability claims made against the condo association that may exceed the association’s insurance limits.
- Deductibles: Can cover the condo owner's share of the master policy’s deductible, which might be substantial in the event of significant damage.
- Financial Protection: Protects against unexpected and potentially large expenses.
- Peace of Mind: Reduces the risk of significant out-of-pocket expenses for condo owners.