Miami Beach Condo Assessments Updated 2014

I originally posted this in 2008 about Miami Beach Condo Assessments and now I am going to update it a little for today’s market.

If you live in Miami Beach at one point or another you will hear someone talk about Miami Beach condoassessments. First, Miamians like to talk about real estate and second assessments in condos are often at one point or another inevitable in this city. Honestly it really depends on the mentality of the condo association and their mentality about how they manage assessments, or not.

Fortunately most of this conversation below has changed since the market crashed.

Often when I am out and about and talking to colleagues and friends, I hear things like….

“Did you hear about their assessment? $35,000 per unit!”
“We are going through our forty year certification, $10,000 per unit.”
“Some of the owners can’t afford the maintenance so they are creating an assessment for the other unit owner’s to pay.”

Does this mean you should sit on the sidelines in fear of Miami Beach condo assessments and wait to buy?

It depends. No, fortunately in today’s market, many buildings have learned their lessons from the past and have implemented strong policies to be a little more “cash heavy” in planning for any ongoing and future issues within the buildings. You should always review the financials of any building you are interested in buying in, however from what we have seen many buildings in Miami Beach have implemented pretty strong policies to protect the owners from the burden of heavy down the road expenses, like better budgeting and strong reserves.

However assessments are not a thing of the past because condominium buildings in any city require constant ongoing maintenance and Miami Beach condo properties more so because of the wear and tear of the salt water on the structures. Plus some of the older buildings are also installing and updating to bring buildings up to current hurricane code standards which is good for many reasons two being; lower insurance costs and of course better safety.

The maintenance issues you are not going to get around. Miami Beach condos are on an island on a beach there is always going to be wear and tear. So reserves and/or assessments are to be expected for maintenance issues.

If the building is in poor financial shape, then that is an entirely different assessment issue and one that you need to weigh with the purchase price of the property.

Assessments aren’t all bad if they are managed properly and are put in place for the right reasons.

If you are thinking about purchasing a Miami Beach condo a few questions that you could ask about an assessment are:

1. How much is the assessment in total? Per unit?
2. Exactly what does the assessment include? (If possible, ask for copy of the assessment documentation.)
3. What other future projects does the board anticipate will need to be completed?
4. What time frame will these projects be pursued?
5. Do they foresee future assessments for these projects?
6. Did the building get a loan to pay for the assessment and/or how are the owners paying for it?
7. How many units owners have paid in full, are paying on time, are delinquent?
8. On regular monthly maintenance payments: How many unit owners are paid to date, how many are delinquent?
9. Are there any units in foreclosure? How many?
10. Does the board get along? (They will probably sit there with big wide smiles and say “yes” but your gut will tell you more. This is important to kind of figure out how if they are working as a team to get the job done.)
11. How many board members have served consecutive years? (More inside information.)
12. Who manages the building? How long have they managed the building?
13. Who is managing the assessment money and the project?

The point is to get a good feel of how the building and it’s financials are is being “managed”.

You are buying a condominium with many different owners, essentially a mini business.

When you are buying into a Miami Beach condo, you are buying into a property that has ongoing financial decisions and you want to make sure that its “members” are working like a well oiled machine. In most instances, the board is not just a few volunteers hanging out being condo commandos. They are the ones making big decisions and those decisions are ones that may hit your purse every now and again. It’s important to know who they are and what they bring to the table.

Trust me, I know. I was President of my condo assocation and it was sometimes a full time job. It’s like running a small business.

The most important thing to know is that assessments are a part of purchasing a Miami Beach condo, it’s how they are managed that count.

Copyright © By Jamey Prezzi 2014 * All Rights Reserved* Miami Beach condo assessments