The truth is that none of us has a crystal ball and can’t predict exactly what will happen, but life has taught us that certain pitfalls and dangers lurk around the corner and could cause a lot of problems. One of those problems is not having enough money set aside if the walls come tumbling down around us. In a condominium, it is mandatory that the board ensures that they fully fund the reserves unless they want to impose special assessments to make the necessary repairs to ensure that the buildings are safe and sound. It is inconceivable that the entire building will fail, right? Well, we have just witnessed one of the most horrific disasters that resulted from a condo that shrugged off their responsibility to fund the reserves and also to make the necessary repairs and replacements as they came due. Entire families lost everything they owned. If there is a lesson to be learned here, it is to make sure the condo collects the needed reserves and that we, the members, pay them when they are due. A special assessment will be a lot less convenient at a later date. 

They built a condominium where a shared building is owned by a business, managed by a board of directors, and funded by the members. What can go wrong? This arrangement complicates things considerably. The owners are required to comply with decisions made by others whether they like it or not. Unlike a traditional form of ownership, where the buyer buys and owns the building and is solely responsible for the maintenance, the members of the condominium are stuck with the responsibility of paying for any problems. And those problems can be disastrous, as we saw when the Surfside condo collapsed, killing entire families.

Jan Bergemann joins us On The Commons. As many of you know, Jan is the founder and President of the Florida-based Cyber Citizens for Justice. Jan has done a fantastic job at CCFJ and is very knowledgeable about condos and HOAs. He has long advocated for fully funding association reserves. Following the catastrophe at Surfside, he took things one step further. Jan called a town hall meeting with legislators and leaders from all different Florida groups to look at ways to prevent this from happening again. Fortunately for all of us, they recorded the meeting on Youtube and for all to watch. I urge you to take the time to tune in and consider something similar in your state. Here is the link  https://www.youtube.com/watch?v=0hotkUUlYqk

Ever since the Surfside condo collapsed in Florida there has been much speculation as to what caused it and what needs to be done to prevent this from happening again.  And predictably, the homeowners themselves were blamed for it.  I have been involved with the policies and politics of HOAs and condos for well over 20 years, but this has always baffled me.  Condos in particular have been sold as “care free living” so why blame the owners who were sold on the idea they didn’t have to do anything?  And they are negligent for not having filled in cracks.  What’s the rationale behind it or were they first in line without a lobby behind them to deflect the accusatory finger pointing at them?  None of the reasons given for the tragedy made any sense to me at all.  I thought we at least needed to know what caused the collapse before we could come up with a way to prevent it from happening again.  Blaming the homeowners because they were not keen on funding repairs on something they no longer owned made no sense to me.  As far as I am concerned it was just more evidence that the HOA and Condo concepts are flawed.  That is a discussion for another time but one we definitely need to have. 

In my experience we never had a vote as to whether we would fund the reserves.  Silly me, I thought all HOAs and condos had to fund the reserves. Apparently that is not the case.  Whoever dreamed this concept up should have ensured that the funds needed to maintain this terrific experiment were always available. 
Julio Robaina joins me On The Commons.  Julio is a former Florida legislator who promised he would always work for the HOA and condo homeowners and he has kept his promise. Even though he is not currently a legislator he is very much involved with drafting legislation to protect the owners from another similar disaster.  I am really excited and impressed with some of the legislation he talked about. Finally some sensible ideas.  I would love to tell you about them but I suggest you tune in and hear Julio explain them.   

Wikipedia describes The Tragedy of the Commons as  “a situation in a shared-resource system where individual users acting independently according to their own self-interest behave contrary to the common good of all users by depleting or spoiling that resource through their collective action.”  But isn’t that just human nature?  Don’t we normally make choices and decisions based on our immediate needs and what benefits us?  And isn’t that especially true for people who are generally struggling to make ends meet?  Can the current model of HOAs and condos function properly for all?

Tyler Berding joins us On The Commons.  Tyler is the principle attorney and founder of Berding-Weil, a California law firm.  Tyler represents residential associations and has long been concerned about the lack of adequate reserve funding, construction defects, condo conversions and the flawed  HOA  and  condo   model.  He is particularly concerned about the buildings as they near the end of their useful lifespans.  What happens to the buildings that need to be refurbished?  What happens to the owners and their assets?  Who pays to make the units habitable if the reserves are inadequate to fund it all? Can retirees on fixed incomes and low income owners afford massive special assessments to cover the shortfall?  What Tyler is talking about is the classic “tragedy of the commons”.  Tyler shares with us  his presentation for a summit next month.  Tyler also has a blog called  Condo Issues  with lots of thought provoking blogs covering all things condo.

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