Peter S. Sachs, Esq., Sachs Sax Caplan Across Florida, condominium owners are seeing a noticeable shift in their association budgets. Monthly dues in many communities have increased in recent years, and the topic has become a frequent subject of conversation among residents and board members alike. For most owners, the concept of Condominium Association fees is familiar. What has changed recently is the broader financial environment surrounding community associations. Several factors — some legislative, some market-driven — are influencing how communities plan their budgets. One of the most significant developments has been increased attention to reserve funding, which refers to the money associations set aside for major future repairs. Following the tragic condominium collapse in Surfside in 2021, Florida adopted new laws aimed at ensuring buildings are structurally sound and financially prepared for long-term maintenance. These regulations require certain condominium associations to conduct structural inspections and maintain adequate reserves for critical components such as roofs, structural elements, and other key systems. For many communities, this has meant reassessing how much should be saved each year to prepare for future repairs. While reserve planning has always been a core responsibility of association boards, the newer requirements place greater emphasis on ensuring funds are available when large-scale maintenance becomes necessary. Insurance costs have also played a role in changing budgets. Condominium associations must maintain property insurance covering buildings and common elements, and in recent years insurance premiums across Florida have risen substantially. As insurers reassess risk and construction costs continue to increase, associations have had to adjust their budgets accordingly. In addition, the everyday costs of operating a community continue to evolve. Maintenance contracts, landscaping services, utilities, building systems, and professional services all factor into an association’s annual financial planning. As these expenses shift over time, budgets must adapt to reflect the realities of maintaining shared property and amenities. For residents, reviewing the association’s annual budget can provide helpful insight into how these factors shape financial decisions within their community. Attending association meetings and staying engaged in governance discussions can also help owners better understand how boards balance current operational needs with long-term...

Across Florida, condominium Associations are navigating a period of continued cost pressure. While much of the focus has been on insurance and reserves, another important area receiving increased attention is vendor contracts. Most Associations rely on a range of third-party vendors to support day-to-day operations, including landscaping, maintenance, security, janitorial services, and property management. As costs for labor, materials, and services have increased in recent years, many of these contracts are being revisited or renewed at higher rates. Carefully reviewing contract terms before renewal or execution is important. Key provisions, such as pricing adjustments, term length, termination rights, and scope of services, may have a meaningful impact on both short-term budgets and long-term planning. An area receiving particular attention is escalation clauses, which allow vendors to increase pricing based on specified factors such as inflation, fuel costs, or material expenses often tied to objective benchmarks such as the Consumer Price Index. While these provisions are not uncommon, Boards should ensure that any adjustment mechanisms are clearly defined, reasonable in scope, tied to objective standards, and should consider including a cap or “not to exceed” provision to limit the extent of any increases. Contract duration is another important consideration. Long-term agreements may provide pricing stability, but they may also limit flexibility if service needs change or market conditions shift. Short-term agreements, while more adaptable, may expose Associations to frequent pricing adjustments. Striking the right balance depends on the Association’s operational needs and financial outlook. Boards should also evaluate the scope of services in each agreement to confirm that expectations are clearly outlined. Ambiguities in service descriptions may lead to disputes, service gaps, or unexpected costs over time. From a legal and governance perspective, vendor contracts should be approached with the same level of diligence as other major Association decisions. Condominium Associations must ensure that contracts are entered into and approved in accordance with their governing documents and applicable statutory requirements. It is prudent for Boards to have Association counsel review any significant contracts before they are approved and signed. All agreements should also be reviewed carefully, particularly for indemnification provisions, insurance requirements,...

The Legacy of Surfside: 1 Year After Champlain Towers South Collapsed, Attorneys Reflect on Progress “We have to recognize that wakeup call, honor the victims and their families by doing something about it, and make sure that this never happens again."   Read the Article Daily Business Review 

The Sun Sentinel featured founding partner Peter S. Sachs as he calls on municipalities to prevent another surfside disaster   Read more below   

    (CNN)An independent budget review warned the Champlain Towers South condo association that its financial reserves were critically underfunded in the face of urgently needed structural repairs a little over a year before the building collapsed, a document obtained by CNN shows.     The condo association only had 6.9% of the recommended level of money to complete repair and replacement projects and stay financially secure, according to a March 2020 report from Association Reserves, a company that analyzes housing association finances.    The report said that various components of the Surfside, Florida, building had zero years of "remaining useful life." Those included the entrance and garage -- where some experts believe concrete cracking may have contributed to last month's deadly collapse.     The study, which has not been previously reported, underscores how squabbling over assessments and underfunded reserves brought the repair situation at Champlain Towers South to a head.The association was projected to have a little over $706,000 in its reserves as of January 2021, according to the report, while Association Reserves recommended it stockpile nearly $10.3 million to account for necessary repairs. Based on that gap, the report found that the Champlain South board was at "high risk" of "special assessments & deferred maintenance." About a year after receiving the report, the board moved in April 2021 to levy a $15 million special assessment on condo owners to raise money needed for repairs. Robert Nordlund, the founder and CEO of Association Reserves, told CNN in an interview that about three out of 10 condo associations nationwide that his company reviews are at high risk, with less than 30% of the recommended reserves. He said the report showed the importance of condo associations stockpiling enough money to conduct regular repairs. "I just wish they had hired us five years or 10 years or 20 years prior," he said of the Champlain South condo board. The board had never previously received a reserve budget study, according to a separate PowerPoint presentation to residents from November 2020. The presentation alluded to the contentious debates among owners about the big-ticket items. "Complaining Or Shouting At Each Other Doesn't Work!"...