Champlain Towers South Collapse: The Canary in the Coal Mine

The Cost of Living in Paradise has just increased. 


The tragic collapse and loss of life at the Champlain Towers South Condominium portends dangers and challenges for Shared Living Communities (SLCs). The most dramatic changes will be felt in older oceanfront high-rise communities. Make no mistake, new buildings, inland properties, townhouses, and every SLC will be impacted. The SLC term is applicable to Condominiums, Co-Op apartments, and Homeowner Associations (HOA). While these have different legal structures and physical characteristics the reverberations from Champlain Towers South will be felt by all.

SLC Internal Management:

Residential communities are challenged to attract and retain qualified Board Members, Officers, and Directors (BMOD]. Most BMODs are well-intentioned but lack requisite skills and experience. Community boards are often under-talented and over-challenged.

An SLC board has three primary responsibilities:

  1. Protect the members of the community.
  2. Follow statutory, regulatory, and community rules and requirements.
  3. Perpetuate the financial and physical assets of the community.

The typical board normally focuses on maintaining low maintenance fees and solving community disputes. Addressing the three primary responsibilities requires community consensus and the expenditure of capital. Difficult items to obtain in any community. The surviving BMODs at Champlain Towers South face years of devastating litigation and loss of their personal assets and financial security. They will suffer a living hell. Expect significant BMOD resignations and difficulty in recruiting new officials in SLCs throughout Florida. The quality of internal community management will likely fall to new lows and in some cases may cease to function.

Poles holding up a foundation on a condo walkway

Metal poles hold up a second-story walkway at a condo in Delray Beach, FL. Source: The Palm Beach Post

Cost of Living in an SLC: 

The cost of living in a condo, co-op, or HOA will explode in the near future. Future articles will expand on this issue.

Suffice to say the following costs will dramatically increase:

  • Insurance
  • Legal
  • Maintenance
  • Inspections and preventative requirements
  • Compliance with regulations and statutory requirements
  • Accounting and record-keeping
  • Property management
  • Financing

Historically BMODs have followed a low bid/low-cost purchase philosophy designed to keep maintenance increases to a minimum. Future boards may be influenced by fear of Personal Liability and adopt a Do it right, at any cost mentality.


Statutory and Regulatory Changes and Enforcement:

Florida has extensive statutory rules and laws applicable to condominiums. State mandates are less stringent for HOAs and co-op communities. Counties and local municipalities have their own regulations and requirements. Current compliance with laws and requirements varies by the community but often does not meet minimum standards. Some communities fail to acquire statutorily required insurance protection.

The political clout of SLCs serves as an inhibitor to the enactment of additional legislation or enforcement of current legal requirements. Example: The prior well-intentioned legislation requiring older high-rise apartments to be retrofitted with fire sprinkler systems. Despite the long lead time for compliance the Condo Community cried unaffordable expense and campaigned for the repeal of this commonsense law. Legislators caved and repealed the law leaving residents to wait for the inevitable high-rise fire with catastrophic loss of life.

Since the Surfside building collapse, Miami-Dade County and local municipal officials are rushing to inspect older buildings and have ordered mandatory evacuations of buildings suspected of being unsafe. Has an epiphany occurred? Did we just realize that life safety issues exist? I am reminded of the line from Casablanca “Shocked, I’m shocked to find that gambling is going on in here.” Expect new state and local regulations to impose additional safety requirements, inspections, and corrective actions. All will cost dearly.


Impact on Professional Services:

The cost of Professional Services, to Shared Living Communities, will increase drastically. Attorneys, accountants, engineers, insurance agents, property managers, and consultants all face major Professional Liability Risks. Professional Liability premiums will increase and be passed to clients. Attorneys will mandate association documents be modernized and laws are followed. Accountants will require compliance with financial standards. Engineers will be meticulous with evaluations and recommendations. Insurance underwriting will tighten. Professional providers will shun uncooperative communities.

A cracked foundation of a walkway

A concrete walkway is separating from the rest of the structure at a condo in Delray Beach, FL. Source: The Palm Beach Post


Real Estate Impact:

Champlain Towers South owners have lost their lives, homes, and possessions. Champlain Towers North owners have lost most or all the value of their apartments. Owners of older oceanfront apartments have seen the value of their apartments impaired. Will there be an exodus from older high-rise properties? Will there be any new buyers? How far will the real estate impact spread? Will banks curtail or cease lending on units/homes in certain communities? Will communities soon fall into The Good, The Bad, and The Ugly categories? These are real risks.

Continue to check back to our blog regularly to stay up-to-date. If you have any questions, concerns, or comments, call our office at 561-392-8888 or email us at [email protected] to get in touch. We’d love to hear from you.


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