Affordable condo, but no air conditioning for a month

By Deborah Goonan, Independent American Communities


Another day, another report of a mature condo association without money and without a plan.

Thirty five of 75 units at Fourth Horizons condominiums in Miami Beach have had no central air conditioning for  a month. The condo association’s old, water-cooled chiller system has finally bit the dust.

Last year the underground well that supplied water to the cooling system collapsed and a new well was drilled. Then the new well failed, too.

Senior citizens are among the residents sweltering in the heat. Frustrated after having been without air conditioning for so long, residents contacted Help Me Howard at 7News Miami. Broward County Public Defender, Howard Finkelstein says that the condo association is obligated to find a way to pay to replace the air conditioning system, and come up with a short term plan in the meantime.


No air conditioning at North Miami Beach condo

Patrick Frasier, 7News Miami (VIDEO)


We spoke to the attorney for the Fourth Horizon board.

Carlos Martin wrote, “The association is looking at a possible temporary portable chiller, or individual in-apartment AC units as a temporary measure. They are also attempting to fast-track approval of the installation of a new permanent chiller with the City of North Miami Beach to resolve the problem as soon as possible.”

The condo board now in charge is relatively new, and Martin pointed out, “The blame falls on the decisions of the association for years to patch the system, which was less expensive than a replacement, while at the same time not saving funds to pay for that solution in the long term.”

Howard Finkelstein: “Clearly this condo board is in a bad spot because of the prior board’s lack of action, but if they cannot cool the building quickly, the residents can sue and a judge can order the association to fix the problem within a certain number of days, as well as pay to put the residents up in hotels.”


According to the report, condo board members just so happen to live in the units that still have air conditioning, at least for now.

And notice that, in order to force the condo board to act, owners would have to file a lawsuit! But that would only add an additional financial burden to all owners in the association.

Because the government classifies housing associations as private organizations, local and state government agencies are often not helpful to owners and residents of condominiums or other forms of Association Governed Housing.

Not an isolated incident

I’ve read so many of these reports and personal accounts on internet forums, and they are all very similar. This time it’s the AC that failed. But it could also be the central heating system (as reported in Ohio not long ago), the elevator, leaky plumbing, worn out siding, a bad roof, or crumbling balconies.

As condominium structures age, things start to wear out. It’s inevitable. But very few condo associations set aside sufficient money on a monthly basis to pay for expensive repairs that will be necessary in the future.

Instead, there’s a tendency to keep the maintenance fees (assessments) as low as possible, to keep living expenses affordable.

That works for a decade or maybe two, depending on the construction quality of the condominium. Then owners suddenly find themselves in need of major repairs, with little to no money in the bank. There are only two ways to raise that money. The association can attempt to get a loan – if they qualify – or they must issue a special assessment. Often, it will be necessary to do both. Either way, the cost of living in the condo gets less affordable with the passage of time.

In many cases, owners remain unaware of their financial risk. They assume that as long as they pay their assessments regularly, there will always be enough money to make repairs and replacements in the future.

Most condo owners are dismayed to receive an invoice for a special assessment. The amount can vary from hundreds to thousands – even tens of thousands of dollars. Some associations will expect owners to pay the full amount within a few months. Others will substantially increase regular monthly fees to make up for the shortfall. It may be necessary to do both.

Suddenly, that affordable condo is not so affordable anymore.

Still thinking of buying a condo?

If you’re still determined to buy a condo, buyer beware.

Don’t expect the seller to disclose problems with the common elements. For one thing, the condo unit owner may not be aware of potential problems or expensive repairs needed in the near future. And, in most states, the association is not legally obligated to disclose information about that pending roof or HVAC system replacement that will require a special assessment a few months after you move in.

It’s up to the buyer to investigate those matters by asking questions. In most states, condo associations are required to provide certain financial documents as part of the buyer disclosure package. At a minimum, be sure to request a copy of the annual budget and the reserve study, including the management report. Request copies of board meeting minutes for the past year or two, and note any discussion about future maintenance projects. Ask a qualified real estate attorney to review the governing documents on your behalf, and to point out any red flags.

Also find out: how old is the roof and exterior siding/paint? How old are the windows, doors, and heating and cooling system? Ask other residents about any history of plumbing leaks or storm water back up, or issues with the water and sewer system. All of these major components are expensive to maintain and replace, and the association may lack sufficient savings in a reserve account to cover the cost.

You can count on your assessments increasing as the structure continues to age. Understand that, as the maintenance costs increase, the value of your condo may decrease – or at least fail to increase – over the same period of time.

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