OT: Question for Real Estate Gurus - Delray Beach, FL

[TommyGunn]

Hey guys. Throwing this out there as I’m amazed sometimes at the level of knowledge on this board on various topics

I made an offer that was accepted on a small condo in Delray Beach, FL. I think I got a great price. But getting cold feet with all the doom and gloom predictions about HOA fees crushing condos.

But this condo is in a hot area. A mile from the beach , so not too close to the water. Is 17 years old and only 4 stories high. Can walk to Atlantic Ave so location is really nice.

Is the HOA concern more about high rises that are right on the water? Or is it more widespread and this purchase is a bad idea. Appreciate any insight here. Go RU!

 

[yesrutgers01]

Do you not know the HOA fees?

 

[TommyGunn]

I do know them today - around $900 which is already insane. But trying to assess the risk of drastic increases

 

[Good-Knight]

Despite the school shooting, it is one of the best public school systems in the state.

 

[ScarletKid2008]

You’re asking for people to predict the future.
It’s impossible to do. HOAs are being squeezed by 1. Increased insurance 2. Tougher regulations and inspections than in the past 3. Rising costs

Here’s some things that can help you assess the situation or at least ask the right questions.

- Does it appear the property, common areas have deferred maintenance? Such as a beat up driveway, old roofs, sidewalks with cracks, playground that looks unkept, etc
- Ask when was the last special assessment. Ask for how much, what did it cover. How long did owners have to pay it
- Does the HOA have cash reserves. How much. Is it accurring annually for future capital projects.
- ask if the condo association has had a recent inspection of infrastructure. What were the results. Any action expected ?

 

[TommyGunn]

Awesome stuff. Thank you

 

[AM ClocksPF]

I do know them today - around $900 which is already insane. But trying to assess the risk of drastic increases

My understanding is that any condo building that is over 3 stories must have fully funded reserves. In the past people usually voted to only partially be funded but after the condo collapse in Miami the laws have been changed. In addition condo's must be inspected if they are over 30 years old. So all those costs add up (insurance escalation, fully funded reserves, taxes rising, inspections).

I had a condo in Boca where the HOA was $400 a month 9 years ago, now they are approaching 1K

 

[TommyGunn]

Great feedback guys. Regarding reserves. Is there a rule of thumb of what a “good number” is there. Maybe so much per unit? Or a multiple of what the annual maintenance costs are?

 

[mdk01]

Flood plain? BTW, New Jersey is mandating reserve requirements for condos to be phased in over a period of years. Anything pending like that in Florida?

 

[Knight Shift]

Hate to be a gloom and doom person, but you may want to review the linked story. Can't find the one I am thinking of, but I remember reading (or watching) a story on how this same problem can happen at other Florida condos. In my experience, living in two communities (not condos) managed by HOAs, the people on the boards of HOAs rarely have qualifications, experience or the smarts to make decisions. Many HOAs have moved towards "professional management.

$900/month would be a non-starter for me. But if you are still considering, perhaps ask about the history of increases of the fees. Have they increased significantly more recently? Why?

But to the linked story:
"Investigators have determined Champlain Towers’ integrity had likely been compromised when it was being built in the 1970s, noting that the design and construction of some parts didn’t meet standard building code requirements at the time."

You may want to have an inspector (or do it yourself) closely examine the structural elements and any signs of deterioration. @ScarletKid2008 gave good things to look for.

Google can be your friend. Google Delray Beach and condo safety issues. See link below. Hope you are not looking at Linton Ridge.

Also consider contacting the building department in Delray Beach and ask if your condo building/complex has had any safety issues.

https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html

Concerns continue over Delray Beach condo complex propped up by poles

Construction workers are now trying to shore up several buildings in the Linton Ridge Condo Complex in Delray Beach after at least one was deemed structurally unsafe. Deep cracks and crumbling cement can be easily spotted on multiple buildings within the complex and now, poles known as "support...

cbs12.com

'We all saw what happened at Surfside.' 28 car-jack type 'jack stands' holding up Delray Beach condo

Twenty-eight car-jack type 'jack stands' have been placed throughout the structure to prop up the second floor of a building in Delray Beach.

okcthunderwire.usatoday.com

 

[TommyGunn]

Hate to be a gloom and doom person, but you may want to review the linked story. Can't find the one I am thinking of, but I remember reading (or watching) a story on how this same problem can happen at other Florida condos. In my experience, living in two communities (not condos) managed by HOAs, the people on the boards of HOAs rarely have qualifications, experience or the smarts to make decisions. Many HOAs have moved towards "professional management.

$900/month would be a non-starter for me. But if you are still considering, perhaps ask about the history of increases of the fees. Have they increased significantly more recently? Why?

But to the linked story:
"Investigators have determined Champlain Towers’ integrity had likely been compromised when it was being built in the 1970s, noting that the design and construction of some parts didn’t meet standard building code requirements at the time."

You may want to have an inspector (or do it yourself) closely examine the structural elements and any signs of deterioration. @ScarletKid2008 gave good things to look for.

Google can be your friend. Google Delray Beach and condo safety issues. See link below. Hope you are not looking at Linton Ridge.

Also consider contacting the building department in Delray Beach and ask if your condo building/complex has had any safety issues.

https://www.cnn.com/2024/03/08/us/surfside-condo-collapse-investigation-takeaways/index.html

Concerns continue over Delray Beach condo complex propped up by poles

Construction workers are now trying to shore up several buildings in the Linton Ridge Condo Complex in Delray Beach after at least one was deemed structurally unsafe. Deep cracks and crumbling cement can be easily spotted on multiple buildings within the complex and now, poles known as "support...

cbs12.com

'We all saw what happened at Surfside.' 28 car-jack type 'jack stands' holding up Delray Beach condo

Twenty-eight car-jack type 'jack stands' have been placed throughout the structure to prop up the second floor of a building in Delray Beach.

okcthunderwire.usatoday.com

Good stuff Knight thanks. Not looking at Linton ridge and this place was built in the late 90s. But still very paranoid about it.

 

[Knight Shift]

Good stuff Knight thanks. Not looking at Linton ridge and this place was built in the late 90s. But still very paranoid about it.

IF you have a friend down there, or your realtor, the building inspection department "can" be helpful. It is an underutilized resource.
Keep in mind, I hate HOAs- two very bad experiences soured me. But that does not mean all HOAs are bad. There are some good ones.

 

[Scarlet4Shore]

Definitely check the amount they have in reserves based on their reserve studies. Florida was the first, and NJ now the second, state to require X amount of funding in the reserves based on the reserve study. I am on my condo board. We have some money in reserves, but not enough based on our reserve study, so we had to raise HOA fees almost 17%. You do have 10 years to make up the deficit.

Here is a link to the Senate bill. https://www.crcgroup.com/Tools-Inte...-4-d-what-does-it-mean-for-condo-associations

 

[voltz99]

You’re asking for people to predict the future.
It’s impossible to do. HOAs are being squeezed by 1. Increased insurance 2. Tougher regulations and inspections than in the past 3. Rising costs

Here’s some things that can help you assess the situation or at least ask the right questions.

- Does it appear the property, common areas have deferred maintenance? Such as a beat up driveway, old roofs, sidewalks with cracks, playground that looks unkept, etc
- Ask when was the last special assessment. Ask for how much, what did it cover. How long did owners have to pay it
- Does the HOA have cash reserves. How much. Is it accurring annually for future capital projects.
- ask if the condo association has had a recent inspection of infrastructure. What were the results. Any action expected ?

Don't the new rules actually mandate a number of the issues you noted?

 

[newell138]

$900 a month!? Do you get free breakfast? It’s only going to go up so keep that in mind. The HOAs at any place I’ve looked at in FL were always the first reason I opted not to buy. At this point it just seems so much easier to rent as much as it would be nice to have a place to call your own

 

[BigEastPhil]

My grandparents bought a place in Delray Beach in 1976 or thereabouts.

It’s amazing how much Delray Beach has changed in the past 50 years !

And more amazing that an old hangout of mine - Boston’s - still remains there along the beach !

 

[Knight Shift]

Good stuff Knight thanks. Not looking at Linton ridge and this place was built in the late 90s. But still very paranoid about it.

I think this is what I saw regarding Florida condos. Maybe the condo association you are considering already hiked the fees?

 

[tom1944]

My understanding is that many HOAs did not adequately fund their reserves because the residents figured they would no longer own when the expense would hit.

 

[LETSGORU91]

I had a condo in Boca where the HOA was $400 a month 9 years ago, now they are approaching 1K

900 to 1K a month? Good God!! Move to Florida...the taxes are cheap. Only to be usurped by HOA fees. I get that insurance and other costs have risen but who's lining their pockets down there?

 

[Knight Shift]

900 to 1K a month? Good God!! Move to Florida...the taxes are cheap. Only to be usurped by HOA fees. I get that insurance and other costs have risen but who's lining their pockets down there?

The hurricane insurance is unreal. A friend built million $ plus home on the west coast of Florida. He did it with cash and skipped the homeowner's insurance (at least for the building). Said it did not make sense. Their house survived Hurricane Ian just fine. We did the same with flood insurance after Sandy at our place in a flood zone near the beach in Belmar. We figured Sandy would be the worst we would see in our lifetime.

 

[Mr_Twister]

My HOA at Marco Island is $1000/month but it covers absolutely everything but your electric. Cable TV, internet, sewer, water, garbage, immaculate landscaping, gate house security for the community, boat slips, swimming pools, outside gas grills, Chickee huts, recreation facilities (tennis, pickle ball, putting green, kayak racks, clubhouse). Real estate taxes less than $2500/year.

 

[Knight Shift]

My HOA at Marco Island is $1000/month but it covers absolutely everything but your electric. Cable TV, internet, sewer, water, garbage, immaculate landscaping, gate house security for the community, boat slips, swimming pools, outside gas grills, Chickee huts, recreation facilities (tennis, pickle ball, putting green, kayak racks, clubhouse). Real estate taxes less than $2500/year.

That's a lot of great items for $1000/month. Don't know the going rate for a boat slip there, but for a 6 month season in NJ a slip can run $5000 or higher.