TCPalm study finds about 70 Treasure Coast condos have maintenance issues – but repair costs often present a problem if a lot of unit owners are on fixed incomes.
TAMPA, Fla. – The engineer’s report was clear. Barclay Beach Club was in trouble. The Fort Pierce oceanfront condo’s floor-to-ceiling windows were leaking. Railings were letting water seep into the concrete. Balconies were in bad shape.
Tony Lennie, one of 80 owners of the 11-story, 57-year-old building, knew there would be a big obstacle to hurdle. The project would cost $1.7 million, with each owner responsible for about $21,000. Many were seasonal retirees with stagnant incomes.
“I kind of liken it to the five stages of grief, with the first stage being denial,” said Lennie, the board president. “That’s exactly what happened.”
It took Barclay Beach Club 1½ years to start repairs after receiving the first engineering report in November 2019.
Months later, a 12-story condo in Surfside collapsed, killing 98 people. That building also had concrete damage before it failed.
Nearly 70 Treasure Coast oceanfront condos face some of the same problems, according to a TCPalm investigation of construction permits and inspection reports from Jan. 1, 2019, through June 28, 2021. Concrete damage, steel corrosion and other major issues are common, but condo boards tasked with keeping buildings safe sometimes don’t act or have the money to.
Major projects, mostly for concrete issues, totaled over $11.7 million in construction permits alone, TCPalm’s investigation found. That doesn’t even include other permits requested for the same projects, but outside TCPalm’s investigative timeframe.
“A lot of the people who live in condominiums in Florida are there for a good time, they’re not there for a long time,” Lennie said. “They’re kind of hoping they can maybe get out before … the real expenses come due.”
Many condos were built in the 1970s and ‘80s, when building codes were weaker and materials inferior. St. Lucie County is the high-rise condo hotspot, with no height restrictions. Martin County caps buildings at four stories and Indian River at three.
Barclay Beach Club didn’t have money saved to cover its project – and still doesn’t have “anywhere near” what’s needed for future repairs, Lennie said. Owners balked at possible costs, calling project engineer James Emory “overboard” and “out of his mind.”
It didn’t matter that Keystone Engineering had done over 400 projects specializing in such concrete work for over two decades, but Emory was used to pushback. He saw it secondhand at Surfside, where the board took years to act. After the condo collapsed, calls for inspections and repairs increased on the Treasure Coast, Emory and other engineers and building officials told TCPalm.
“Right now, people believe you because they know that this really is real,” said David Colston, president of Structural Engineering Professionals Inc., who worked on a project at Sands on the Ocean in Fort Pierce. “They see what can happen.”
But Scott McAdam, an Indian River County building official, said he didn’t see more appreciation for his staff after Surfside.
“I haven’t sensed the construction industry taking a breath and saying, ‘Thanks for the regulators,’” McAdam said. “No one likes the regulators. We’re a little bit of a hurdle – a necessary evil – but we try to build great relationships.”
Condo boards without reserve funds unprepared for big costs
Ocean Club II’s 36 owners were startled at what contractors found when they opened the walls of their three-story Vero Beach condo: crumbling windowsills, huge voids and rusted steel.
But the association had no money in the bank. Past boards had voted against having a reserve fund to cover future repairs and had delayed maintenance projects.
“It was a pattern of deferral,” said Mark Zappala, a recent board president. “[The board] just finally had to stop passing the buck. … You just can’t kick the can down the road.”
Florida law requires condo boards to have reserve funds in their annual budgets, said attorney Richard DeBoest, who specializes in these laws. The catch? The law also lets them waive or reduce their reserve funds.
Florida is one of 11 states that require reserve funding, but one of few that lets residents waive those funds, according to an advocacy organization.
“It’s like crack cocaine,” DeBoest said. “Once an association gets into the habit of annually waiving reserves, they never can break it. The people are just addicted to the lower assessment.”
Zappala knew unpopular decisions needed to be made. He became president of Ocean Club II and oversaw contentious debates, eventually stepping down after a couple years of being “a lightning rod for a lot of criticism and complaints.”
The $2.4 million tab was more than expected, as engineers found improperly installed windowsills had exacerbated the typical deterioration from a salty ocean. Owners suddenly faced about $65,000 each in repair costs.
“It was borderline panic,” Zappala said. “It could’ve been catastrophic, but we had a good team in place.”
After that, the board started saving reserve funds to offset future bills.
Will Legislature address reserve funds?
Condos with reserve funds can prevent severe issues by tackling small projects that stop concrete cracks from getting bigger or rusted steel from worsening.
Sands on the Ocean owner Michael McConnell knows the $2.5 million concrete repair job on his 14-story building shouldn’t have been so expensive.
“If you had done this a little bit at a time over the years, we wouldn’t have had so many projects all at once,” he said of past boards. “Unfortunately, that didn’t happen. We got stuck with a lot of projects that should’ve been addressed a long time ago.”
Emory compares concrete repairs to dental work. Cavities, like concrete cracks, should be filled quickly to avoid lots of pain and big expenses later.
“Time isn’t your friend in this industry,” he said. “The longer you wait, the more expensive your project is going to be.”
The situation is even worse now, with Surfside increasing demand for materials and labor, COVID-19 creating supply chain shortages and Florida’s population surging.
The Legislature should reform condo laws, DeBoest said. The attorney supports the laws outlined by a condo safety task force formed after the Surfside collapse, including stricter regulations on waiving or reducing reserve funds.
In 2008, the Legislature passed a law requiring reserve studies to predict how much money condo boards should save for future repairs. Two years later, they repealed it under pressure from condo board lobbyists. This year, Sen. Jason Pizzo of Miami-Dade County said he plans to file legislation regulating condo boards.
“Surfside,” DeBoest said, “is the worst-case scenario of kicking the can down the road on maintaining your building. We’ve got to protect the people from themselves to some degree.”
No Treasure Coast oceanfront condo is on the brink of collapse like Surfside, local building officials told TCPalm. But that doesn’t negate the need for repairs, said McAdam of Indian River.
“Those buildings need proper maintenance and that means weatherproofing at all times,” he said. “If you don’t do proper maintenance, then you’re behind the eight ball, and you’re always playing catchup, and it’s going to be very expensive.”
© 2022 Journal Media Group. Sydney Czyzon is a TCPalm projects reporter working on investigations and enterprise stories.
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