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THE FINE PRINT

After Florida tragedy, condo owners are asking: Does my building set aside enough money for repairs?

Some condo owners at Harbor Towers in Boston (at right) went to court about 15 years ago trying to block special assessments for $75 million worth of upgrades. The effort failed.
Some condo owners at Harbor Towers in Boston (at right) went to court about 15 years ago trying to block special assessments for $75 million worth of upgrades. The effort failed.Craig F. Walker/Globe Staff

Condo owners throughout New England were no doubt watching in horror as new details emerged about the deadly collapse of a 13-story condo building in South Florida.

With the death toll expected to exceed 110, it may be one of the deadliest accidental building collapses in American history.

How could such a thing happen? And who was in charge?

No single individual is responsible for the maintenance and repair of a condo building. Each unit is owned and controlled individually, while common areas, such as the roof and grounds, are owned collectively. Responsibility for maintaining them falls to the condo association.

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It’s not unusual for unit owners to disagree, sometimes bitterly, over how much money to spend on maintenance and on big-ticket repairs. According to news reports, unit owners and the board of the condo association of the high-rise that collapsed in Surfside tangled for years over paying for the $15 million in needed repairs.

The likelihood of a disaster such as the one in Florida happening here doesn’t appear high, in part because condo developments tend to be more horizontal (town house-style) than vertical (high-rises).

But the tragedy in Surfside makes it a good time to think about the condition of your condo building, and how decisions are made on maintenance, reserve funds, and the hiring of experts.

Q. Who is responsible for the upkeep of my condo building?

A. All unit owners are legally part of a condo association. But the real power belongs to the board, typically three to seven unit owners serving staggered three-year terms without compensation.

Q. How many condo associations are there in Massachusetts?

A. Massachusetts ranks number seven among the states, with 11,100 condo associations and 1.6 million condo residents, according to the New England branch of the Community Associations Institute.

Q. What exactly are board members empowered to do?

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A. The board sets an annual budget, which determines how much each unit owner must pay in monthly condo fees. Fees are apportioned according to each unit’s “beneficial interest,” which is set when the development is completed and based mostly on the size of the unit, but also on such things as the floor on which the unit is located and its views.

Condo fees — which can be several hundred dollars a month, or more — pay for such things as utilities in common areas, landscaping, maintenance of exterior walls, snow removal, security, and insurance.

The board is also empowered to hire property managers, lawyers, engineers, and other professionals, all of whom report to the board.

The board acts as the chief executives of the association. It decides virtually every detail: not only when and whom to hire to install new siding but also the color of the new siding.

While some board members may have a background in property management, engineering, or finance, others do not. Many consider it a thankless job.

Q. What are some of the most important decisions board members make?

A. How much money to put into maintenance, repairs, and reserves is a big one. Nobody wants to pay high condo fees, but putting aside too little each month from fees means there is no cushion should a major expense arise. Anyone who owns property knows you have to keep plowing money into the plumbing, electrical, and heating/cooling systems, in addition to bigger projects like roof replacement. But most of us also know how tempting it is to defer maintenance to save a few bucks.

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Q. What happened at the Florida condo?

A. In 2018, the board hired engineers to inspect the structural integrity of the building. Already, there were signs of trouble, including cracks in the concrete and water pooling in the garage. At first, the estimated cost for a major structural overhaul was $9 million. But by the time the condo board acted three years later the cost had jumped to $15 million. The gut-wrenching collapse occurred June 24, just as the overhaul was beginning.

Q. What caused the delay in going forward at the Florida condo?

A. Many residents vehemently opposed the overhaul, even circulating a petition among unit owners to stop it, according to a detailed New York Times report. The Times described board meetings as sometimes “toxic” and reported that several board members quit in frustration.

Q. How are residents usually expected to pay for major repairs?

A. If there is not enough in the reserve fund — essentially the condo association’s savings account — condo boards must make a one-time “special assessment,” in which the cost of a major repair is divided among the unit owners. Or the board could pay for it with a loan, with unit owners making monthly payments until the debt is paid off. These costs to unit owners would come in addition to regular monthly condo fees.

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The special assessment at the Florida condo building for major repairs ranged from $80,000 to $200,000 per unit.

About 15 years ago, residents of the luxury Harbor Towers condos on the Boston waterfront got hit with special assessments ranging from $70,000 to $400,000 to pay the $75 million cost of replacing decades-old electrical, heating, air conditioning, and ventilation systems, according to Globe stories published at the time. Some unit owners went to court to try to block the assessments, but the effort failed.

Q. Didn’t the Florida condo have reserves to pay for the overhaul?

A. Yes, but only $800,000 for a $15 million job.

Q. Do most condo associations have adequate reserves?

A. In a recent survey of condo board members and managers conducted by a committee of the Community Associations Institute, which advocates for condo associations, half said reserves were inadequate. Associates Reserves, a company that conducts reserve studies on behalf of condo associations, said about one-third of associations are badly underfunded, the Times reported.

Q. How much should go into reserves?

A. Federal agencies that guarantee mortgages recommend 10 percent of an association’s annual budget be set aside as reserves.

Q. How does a condo association determine what big-ticket repair items may be coming down the road?

A. They need to do a reserve study, which determines when major work will be required based on “useful life” assumptions, such as an asphalt roof ordinarily needing replacement every 20 years. The study will recommend how much money should go into reserves to meet expected repair and replacement costs.

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Q. Are there other ways to determine the health of a building?

A. A “conditions survey” determines the current condition of a building, for instance, if a roof was installed improperly and will need immediate replacement.

There is also a “structural inspection,” which goes beyond looking at the roof and boiler to examine steel columns and reinforced concrete, sometimes by drilling into them. In Florida, the building code requires a structural inspection every 40 years. Most high-rise buildings in Boston are required to undergo a checkup every five years.

Q. Does Massachusetts mandate that condo associations maintain a certain level of reserves?

A. State law requires condo associations to have an “adequate replacement reserve fund,” but does not define “adequate” and does not provide a mechanism for a board to determine whether its reserve is adequate, according to attorney Thomas O. Moriarty, who specializes in condo law. Condo advocates nationwide are talking about pushing state legislatures to mandate specific levels for reserve accounts.




Got a problem? Send your consumer issue to sean.murphy@globe.com. Follow him on Twitter @spmurphyboston.