By Deborah Goonan, Independent American Communities firstname.lastname@example.org
As the recovery of victims of the collapse of Champlain Towers South condominium wraps up, and investigations of the cause or causes of the disaster begins, consumers must come to grips with the grim realities of common ownership.
As of this week, the search for victims of the collapse of Champlain Towers South, a 136-unit, 13-story condominium in Surfside, Florida, has come to an end.
In all, 97 people perished in the collapse on June 24, 2021. Of more than 150 persons previously unaccounted for, dozens were confirmed to have not been inside the condo tower at the time of its collapse.
According to NPR, Miami-Dade Police Department continues its investigation into the cause of the collapse, reportedly treating the area as a crime scene. Meanwhile, the National Institute of Standards and Technology (NIST) has begun the process of combing through the debris, which has been relocated offsite. There, engineers can more closely examine evidence. The investigation into the cause of the sudden collapse is expected to take months, if not years.
In the weeks since disaster struck at Champlain Towers South, in the middle of the night while residents were sleeping, dozens of reports have revealed significant deterioration of the building, stretching back more than three years.
In a previous post, IAC summarized several possible factors that might have contributed to the sudden failure of the tower, to name a few:
- defective design and construction of the pool deck,
- many years of deferred maintenance,
- water intrusion into the underground parking garage (as well as the interior of some units, and structural elements such as balconies as well as the entry portico), and
- the condo association’s inability to address necessary concrete and drainage repairs as advised by a 2018 engineering report.
Also, in the past several weeks, local governments in the Miami-Dade County area have conducted hundreds of building safety audits. According an article in the Miami New Times, eight structures have been temporarily or permanently evacuated, and one — a movie screen — has collapsed. Residents have been advised to evacuate the two “sister” condo towers of Champlain Towers South — Champlain Towers North and Champlain Towers East. All three structures were built in the 1980s, with the same design, and by the same developer.
In addition, the state of Florida has set up two consumer hotlines and a website, where concerned parties can report condo or HOA concerns.
For assistance in Florida, call 1-800-HELP-FLA or 1-800-FL-AYUDA, if you speak Spanish.
Beyond Miami, FL, more signs of dilapidated condominium buildings
Consumer concerns about the safety of condominium and apartment towers aren’t isolated to Florida.
As reported in the New York City edition of The Real Deal, owners of condos and co-ops wonder whether their aging buildings could suffer a sudden collapse. Most of the city’s aging residential units are also made of concrete. Like many Florida condos, towers of all sizes in the Big Apple are located near the bay, and are regularly pummeled by salt air and wind.
Crain’s Business Journal also reports that many unit owners and residents are uneasy in the Windy City of Chicago. At least one condo tower on the shores of Lake Michigan may be at risk. The city recently ordered the closure of the 8-story parking garage at 111 East Chestnut Condominium.
The garage, which is managed by a separate condominium association from the owners’ portion of the building, serves as a support podium for the residential tower above. An engineering report from 2018 noted extensive concrete spalling and cracks in or around support columns, and the urgent need to shore up the support structure. Yet, shockingly, the garage condominium association has sat on this report for nearly three years, taking no action to address safety issues.
Another condo tower in Palm Beach Resort, Alabama, has been the subject of a lawsuit filed last August, as reported on AL dot com. Conditions of the building’s structure also mirrors that of the ill-fated Champlain Towers South — deep concrete cracks, indicating structural damage.
Health, safety, and deferred maintenance complaints are common for condominium, co-op, and homeowner associations
Here at IAC, readers can find dozens of posts citing examples of owners of property in condominiums and planned communities dealing with defective, shoddy construction, as well as deferred maintenance.
But, trust me, documented media reports of dysfunctional HOA governed communities are just the tip of the iceberg.
Each week, I hear from several owners with similar complaints, searching for help. They share concerns that their condominium association isn’t maintaining their building, or that their HOA won’t maintain common areas and infrastructure.
Notably, some of the owners who contact me are board members — or former board members — of their HOA. They are equally frustrated that homeowners or fellow board members seem unwilling to pay for necessary, often expensive, repair and renovation.
From leaky roofs and windows to crumbling private roads and parking areas, from community swimming pools shut down by the board of health to condos with unsafe balconies, from moldy condo units to swampy retention ponds, from failure of retaining walls to severe erosion and landslides, I thought I’d seen and heard it all…
…until June 24, 2021, the day that the 13-story Champlain Towers South condominium suddenly collapsed.
Deferred maintenance is no longer limited to low-income housing communities
In the past, IAC has posted about dangerous and uninhabitable housing that had to be condemned. Thankfully, local governments too action to evacuate residents long before a sudden collapse that might have led to dozens of fatalities.
Specific blog posts on IAC have featured old and run-down low-rise or townhouse condominium communities that have evolved into deplorable, low rent housing — often managed by irresponsible landlord-investors.
Likewise, past cases of shoddy and defective construction have tended to occur in moderate and affordable housing developments.
But in recent years, those historical trends have begun to change.
In 2016, many were shocked to learn of the sinking of the world-renowned Millennium Tower, now known as the Leaning Tower of San Francisco.
The revelation that the tower was sinking and leaning sparked years of litigation between units owners, developer, the city and its transit authority. Soon, the world would learn that, despite pre-construction engineering recommendations, the piles that support the foundation of this spectacular, award-winning tower had not been drilled down to solid bedrock. Instead, the base of its support posts were buried into soft, sandy soil. Experts say that, as a result of this error, Millennium Tower was rapidly sinking and leaning to the northwest. It was a particularly alarming matter in San Francisco, a city prone to earthquakes.
Millennium Tower was completed in 2009. In a hot condo market, the starting price point to snag a unit in the striking 58-story glass-covered high-rise was $4 million. Not surprisingly, upon the startling news of the building sinking, property values plummeted.
Incidentally, to this day, the greater public still doesn’t know exactly how developers were able to take such drastic construction shortcuts, right under the noses of San Francisco’s building inspectors.
Interesting side note: between 2010-2020, the saga of Millennium Towers was just one of several reports of luxury high rise condominiums plagued by defects in design and construction.
By the time wealthy and famous owners of units in Millennium Tower settled their lawsuit with their developer, the Transit Authority, and the City of San Francisco in 2020, buyers of high-end condo towers in the U.S. had become a bit more wary of potential defects that lurk undetected in recently-constructed buildings.
And now, as news of the recent collapse of a 40-year-old condominium tower in Surfside, Condo buyers in Florida and elsewhere are coming to grips with another disturbing reality. No matter how much you pay for that water view or penthouse unit, there’s no guarantee that your building is well-maintained — let alone a safe haven — for you, your family, and your guests.
How did we get here?
For the past seven years, I’ve been researching and writing about social and economic dysfunction in HOA-governed communities of all types and sizes.
Condominiums, housing cooperatives, or planned communities consisting mainly of single family homes — no common interest community is immune to the many challenges of shared ownership and shared maintenance of residential, commercial, or mixed use real estate.
In an ideal world, co-owners and neighbors would harmoniously work together to maintain their multifamily buildings, shared amenities, and community infrastructure.
In reality, the majority of property owners are not invested in their HOA-governed communities for the long term. And somewhat surprisingly, regardless of income level, most owners prefer to keep condo, co-op, and HOA fees as low as possible.
Such is the nature of the real estate game in the U.S. Each owner dreams of buying at a relatively low price and selling at a high price, reaping the rewards of their investment.
During the time they own their property, most owners will delay or avoid certain expensive construction projects — especially if they believe their investment won’t increase the value of their home or condo.
The owner of a single family home that isn’t well-maintained, or the owner of a home that hasn’t been updated in decades, is often forced to sell their fixer-upper at a discounted price. Repair and renovation becomes the next buyer’s problem, and potential opportunity.
But, in a multifamily condominium or housing co-op, the tendency to defer maintenance backfires on many unit owners, who aren’t educated or fortunate enough to sell before repair or replacement projects become urgent.
Typically, by the time a majority of unit owners acknowledge that they can no longer put off fixing structural problems, the cost of the project is prohibitively expensive.
Condo (and HOA) politics
Getting unit owners to agree that a problem is real, and serious enough that something needs to be done, is Step One.
In nearly every condo, co-op, or homeowners association, there are multiple warning signs long before the majority of owners acknowledge problems.
In too many cases to count, the voice of at least one Cassandra is ignored or even vilified by the political ruling class in the HOA-governed community.
For readers who are unfamiliar with my analogy, Cassandra, according to Greek mythology, was given the gift of prophecy by the Greek god Apollo. But when Cassandra refused to submit to Apollo’s demands, he put a curse on her. Although Cassandra’s prophecies were astonishingly accurate, no one would believe them, instead choosing to ignore her dire warnings of future calamities.
In the case of Champlain Towers South, the Professional Engineer’s warnings went unheeded. Further investigation will likely reveal that perhaps a few board members took those warnings seriously. Unfortunately, those sounding their warnings lacked sufficient political clout to prompt urgent action — even with expert evidence to back up their claims.
That’s because, in opposition to the lone Cassandra, every common interest community includes its share of diverse personality types with conflicting perspectives. See if you recognize co-owners — or yourself — in the list below.
Common condo/HOA personality profiles
The Deniers — co-owners who simply refuse to believe that their little HOA-governed Utopia could be flawed in any way.
The Polly Anas — these folks admit there are problems, but downplay them. “Everything Will Be Alright” is their motto, and they believe so, even in the absence of any action to mitigate damages.
The Apathetic — most co-owners simply don’t pay attention to what’s going on around them. They are busy living their lives. They pay their HOA dues and fees, expecting the board to deal with day-to-day issues, so they don’t have to. The only event that catches their attention is a sudden increase in regular HOA fees or a huge special assessment.
The Blamers and Shamers — vocal, often abrasive co-owners who seem more interested criticizing the HOA board, the Cassandras, and the hired experts, than in working toward mutually-agreeable solutions.
The Know-It-Alls — HOA board members or co-owners who claim to know better than qualified experts. Depending on the community, the qualified experts could be association-hired consultants. But sometimes, experts happen to be co-owners with relevant professional knowledge and experience.
The Pathologically Suspicious — these are the co-owners, sometimes rogue board members, who are convinced — without evidence — that the association’s governing board is colluding with the management company, HOA attorneys, insurance providers, and/or construction service providers to fleece the members of the condo association out of as much money as possible.
The Opportunists — these are sneaky, self-entitled owners who use HOA rules as a weapon, who take advantage of owner apathy to skim some dues money for personal use, or who never let a good crisis go to waste. All too often, Opportunists wind up serving on the condo, co-op or HOA board.
The Silent Stand-bys — co-owners who agree with and secretly support Cassandra, but won’t speak up publicly, for fear of retaliation by the HOA board or neighbors allied against change of any kind.
Finding consensus among a group of co-owners, some of whom have toxic personalities, is a bit like herding cats. With persistence, it can be done. But it will take time!
In the meantime, co-owners typically bicker, debate, and accuse each other of being obstacles to a solution. The common property continues to degrade. Several months or years later, when conditions get really bad, co-owners to finally agree that they can no longer put off repairs.
Co-owner disputes over The Money
When you’ve finally convinced the majority of owners that something must be done, then it’s time to move onto Step Two.
Step Two is getting everyone to agree upon and pay for a plan of action.
Brace yourselves. This is infinitely more difficult to accomplish than Step One, because co-owners hold vastly different priorities and perceptions of reality. Here are some typical responses and attitudes you’re likely to encounter in an HOA-governed community.
- John thinks his townhouse association’s proposed exterior refacing budget is way too high. He wants the HOA to get additional bids, and perhaps even scale down the project to save money. He believes the owners should replace the siding this year, but delay replacing their windows and doors for the next three years.
- Maxine, whose condo unit has been repeatedly flooded by a leaky roof, is ready to write the Big Check, and get the project underway as soon as possible. She’s frustrated by her ‘selfish’ neighbors, who balk at the high cost of the project. It isn’t covered by insurance, and there’s not enough money in the reserve account to pay for a re-roof for each building in the community.
- Ed and Susan, a married couple who own a home in a planned resort community, are convinced that board members and the community association manager are getting 10% kickbacks on the Clubhouse construction contract. To prove their suspicions, they demand to examine every financial record and copy of board meeting minutes for the past 5 years. They might be correct about the kickbacks. But, if they are, the HOA board will avoid giving access to records. Either way, allegations of unethical or illegal behavior , without clear evidence, further undermine trust in the HOA.
- Diane and Pete live in separate units on the same floor of their condo building. They say that they, and many of their neighbors and co-owners, had no idea that the condition of their building was so dire, and are surprised to learn that it needs immediate repair. They blame the condo board for not being transparent with the facts, or withholding important facts from association members and residents. (Note: this is, by far, one of the most common complaints I hear from owners.) Now that they know the truth, they’re having a difficult time accepting the reality that making repairs will require a LOT of time, inconvenience and money. Probably more money than they have on hand.
- Judy, a particularly vocal unit owner, is in complete denial. She insists the condo board is blowing the whole situation out of proportion, and accuses the board, management, and contractors of scheming for personal gain. A sizable group of co-owners, who had hoped to sell their units before being billed with costly special assessments, have aligned behind Judy. Their goal is to get the special assessment canceled, and delay repairs long enough for them to sell and saddle future buyers with an even bigger special assessment.
- Jeanne, a recently-elected board member, says she wasn’t included in the competitive bid process. She doesn’t trust her fellow condo board members’ decision. When she speaks up about her concerns to board members, they bully her until she decides to resign from the board.
- Stephen, a former board member of his condo townhouse association, stepped down a few years ago. He reminds co-owners that the board that served after his departure cannot be trusted. After all, the incumbent board members chose an incompetent contractor that botched their community’s exterior painting project. The paint is already peeling after only two years, and will have to be done again in the near future.
- Chuck, a long-time board member, complains that a vocal minority of unit owners are delaying the start of the project. He fears that undue delays will lead to further deterioration, and even higher costs in the future. (He’s probably right.)
- Amaijah and Su Li just recently purchased their units. They were caught by surprise with a huge special assessment. Although these expensive projects were under discussion at the time they went under contract, the seller and the condo association didn’t disclose these facts prior to closing. They’re both suing the Association, the sellers of their units, and have filed complaints with the local Realtors Board.
- Margaret, Larry, and Albert, all long-time unit owners, each of them living on a fixed retirement income, want to know what happened to all the money they’ve paid in monthly condo fees for the past 20 years. Why didn’t the condo association set aside money in reserves for these major projects? They cannot afford to pay the special assessment, and, at their age, they can’t get a loan. They stand to lose their homes if the HOA forecloses on liens for unpaid special assessments.
Bottom line, collective ownership of real estate is a messy business. Co-owners may be unsure about who they can trust in their community. Various factions will form, with some groups of owners failing to listen to their neighbors and refusing to collaborate on solutions.
No trust in the system, no true commitment to co-ownership
Mistrust is the heart of the problem for many a dysfunctional condominium (or co-op or homeowner) association.
And this really shouldn’t come as a surprise.
After all, with few exceptions, most owners never truly buy into the concept shared ownership. On the contrary, most consumers buy into an HOA-governed community for other reasons:
- the promise HOA-provided maintenance in exchange for paying monthly fees;
- amenity-rich lifestyles;
- luxurious or attractive surroundings;
- to convey a certain social status;
- to reap the benefits of convenient locations or desirable school districts.
Rarely do owners of HOA-governed property think about their self-imposed, intimate financial relationship with co-owners.
As with any legal marriage or business partnership, each participant in a common ownership community commits to joint responsibility for the cost of maintaining the property they share.
But most co-owners aren’t deeply committed to looking out for the well-being of their neighbors and colleagues. In fact, quite often, co-owners barely know one another.
It isn’t that co-ownership can never work. It can, under special circumstances, where co-owners are truly committed to the concept, where members are willing to sacrifice their own selfish concerns for the common good of the group. But, except for certain co-housing projects, this level of commitment is rarely seen in HOA-governed communities.
Before the condo collapses
As noted in the title to this post, at least up until this point, the physical collapse of a condo building is (thankfully) rare.
But the collapse of social cohesion and economic support maintenance of common property is increasingly common. And the problem is only getting worse as HOA-governed communities come of age — approximately 62% are at lest 20 years old, 36% have surpassed their 30th anniversary, and 10% of communities are more than 40 years old.
Normal wear and tear takes its toll on any building or common infrastructure. That’s a given.
The problem is often compounded with lower construction quality standards. This generally equates to a shorter than expected lifespan for condo buildings or community infrastructure. And, when an HOA is half-hearted or negligent about maintenance, structures will deteriorate and fail prematurely — in some cases, as little as 10-20 years following original construction. (link to example in Daybreak UT)
The challenge upon us is, can we fix HOA problems, and prevent future collapse of U.S. housing — both figuratively and literally? If so, how?
For exploration of possible solutions to condo and HOA problems, see my follow up post – HOW CAN WE PREVENT ANOTHER TRAGIC CONDO COLLAPSE? – HOA EXPERTS AND ADVOCATES WEIGH IN.