The fatal collapse of the Champlain Towers South condo in Surfside could force state and local officers to implement new construction codes in South Florida.
By: Edda Pujadas
As a result of the recent tragedy in Surfside, immediate impacts in the real estate market might include Changes in the timing and inspection processes, increases in the maintenance fees for condominium associations, special assessments, and more requirements for the sale and purchase of apartments in the beach area.
Experts believe that the collapse of the condo in Surfside will result in the reinforcement of the construction codes in Florida. These were last updated after Hurricane Andrew in 1992, 29 years ago. Even when there is no reason to generalize and think that buildings are not safe, it is important to make changes in the recertification process that is mandatory every 40 years.
Buildings in Miami Dade County and Broward County must be subject to an inspection program every 40 years. This means that every 40 years, buildings must go through a thorough structural inspection. The question that is arising now and that is the starting point of every analysis conducted after this tragedy is: why should we wait 40 years to recertify a building that is built in the beach, exposed to air and sea water that might be affecting the maintenance of the construction?
One of the most important aspects that we need to recognize is that there have been changes in the environment, the rise of the sea level and the hardness of the sea water and air have changed. We also need to take into consideration that the useful life of a building depends on three fundamental factors: design, construction, and maintenance.
Miami Dade Mayor Daniella Levine Cava has decided to act immediately and announced a plan to meet with experts in the fields of engineering, law, construction, and geology, to determine the cause of the collapse of the building in Surfside. She wants to guarantee “that a tragedy like this does not repeat, ever.”
Even when Miami Dade County and other local municipalities have already increased the inspections to buildings, especially for residential properties of five stories or more and those with 40 years or more in age, it is important to go a step further.
Monica Alvarez, President of the inspection company Complete & Reliable Inspections, with almost 15 years of experience, assures that the inspection procedures will change. She believes that these will be more rigorous and frequent and that additionally, the condo buyers will be now more demanding over the conditions of the condos in which they might purchase an apartment.
“When a person buys a unit in a condo, we as inspectors have the responsibility to check the apartment, the outside conditions of the building, and the air conditioning system. But the building needs to have a structural review that is much more thorough, and in the future, this will be much stricter,” explains Alvarez.
“I believe that the direct impact in the real estate market will be seen in two directions: one is that the associations will be forced to increase their operative budgets and to charge for special assessments to its residents in order to prevent or fix any damage; the other one is that those owners of apartments near the beach will want to sell their properties but there will be no one willing to buy condos, but homes,” states Alvarez.
Sergio Pino, the developer, President, and Founder of Century Homebuilders, states that the fact that the building in Surfside collapsed does not imply that this will happen again, but he does consider it as an immediate need to reduce the time for recertifications from 40 to 5 years.
“To conduct these type of inspections every five years will be cheaper in the long run, because the deterioration will be less and the maintenance expenses needed will be done periodically, without the need to make huge investments. This is especially important in the beach areas, where the water constantly harms the rebar and concrete,” explains Pino.
Regarding the direct impact on the real estate market, Pino considers that surely there will be buildings that will need to impose a special assessment to the owners, but he does not believe that this will affect the sales. “There is a short inventory of properties for sale in Miami, so maybe, for now, the buyers will prefer to buy homes or townhomes, but they will continue buying.”
Jesus Quintero, President of JQ Group of Companies, with ample experience in the construction of buildings, believes that there will be certainly some impact in the sales of apartments in the beach, especially older buildings. Buildings of more recent construction have been developed under better and stricter regulations and have used technologic resources that have made them more reliable and safer.
“I believe this will be a momentary effect, caused by fear. In Miami, we build buildings that withstand hurricanes, floods, and saltpeter effects, so the important thing is to determine the exact cause of this tragedy, to avoid that it repeats. We cannot generalize over this fact without knowing if the cause was the lack of maintenance or even a geological fault.”
Quintero indicates that even while the associations play an important role in this business, it is important to take into consideration the responsibility of the owners. “Board members conduct a voluntary job, one that is not easy, and over and over again, we see that the owners do not attend the board meetings. When a special assessment is subject to approval, financial conflicts arise, and it is very difficult to handle these because no one wants to pay more.”
Joaquin Gutierrez is a real estate broker at Canvas Real Estate. He has more than 30 years of experience in the real estate sector and is President of the real estate school JGRES. Gutierrez indicates that with the shortage of real estate inventory that we are experiencing, the sole market that will be affected and for a very short period will be the older apartments in Miami Beach. “This will be for a short period of time, while we don’t know exactly what happened and while the people are still scared.”
“I believe that changes in the construction code will be promoted, recertification processes will go from 40 to 30 years and for sure, buyers, banks, and mortgage companies will start requesting building certifications and the insurances will be stricter,” comments Gutierrez.
Regarding sales, we know that from January to date, eighteen apartments were sold at Champlain Towers, with prices ranging from $350,000 to almost $3,000,000 (depending on the number of bedrooms and square feet). Six of these units were in the South Tower.
In fact, the highest of these sales closed at $2,880,000. This was a penthouse of 4,500 square feet, 4 bedrooms, and three and a half bathrooms, located in the South tower, the one that collapsed. From the date of the collapse to date, five properties that were listed for sale in Champlain Towers were withdrawn from the market.