Before the partial collapse of the Champlain Towers South, condo owners and the Homeowners Association sparred over how to fix growing structural damage. The issue was raised initially in 2018, and divided the residents because of the exorbitant cost to repair the building. Residents were each responsible for nearly $100,000 in repair costs which sadly were not completed before the partial collapse on June 24th.
The condo's association is now in receivership. Twenty people have been confirmed deceased and 128 are still missing. This tragic event is likely to initiate major overhauls in building codes for beach front properties, and will have profound impacts for homeowners associations nationwide.
If the Champlain Towers South had been a timeshare resort that consisted of fixed weeks - the special assessment to repair the structure would have been approximately $1,960.78 per week owned.
Check our math
- The towers had 136 units (*Source Kiro 7)
- The renovation would have cost approximately $12-13 million (*Source NPR)
- Timeshare Developers usually can sell 51 out of 52 weeks (there are a few exceptions to this rule, but this applies in the overwhelming majority of the time).
- Therefore if this property had been timeshare weeks instead of condos the HOA would have 51 weeks x 136 units = 6,936 weeks owners (assuming each week sold and the developer had none).
- $12,000,000 repair costs ➗ 6,936 weeks = $1,960.78 Special Assessment
New overhauls could force more inspections and repairs
If the Champlain Towers South had taken action when the issue was first raised in 2018 the building likely would have not collapsed this past month. The lesson learned from this tragic event is that HOAs and the democratic process do not always produce favorable outcomes quickly enough.
This will likely cause new legislation, regulations, and code enforcement in oceanfront communities. The building repair decision process will be closely watched to ensure safety of building occupants. This will mean higher fees and assessments for condo and timeshare owners because HOAs will be forced to make repairs quickly enough to ensure the safety of building occupants.
Timeshare Owners will pay more
Because HOAs will be forced to comply with tougher safety regulations, there will likely be an instinctive response to increase HOA reserve funds. Reserve Funds are kept to address unforeseen costs that are not budgeted for otherwise. These Reserve Funds will be paid through increased maintenance fees for timeshare owners. This reduces the risk of special assessments and decreases the cost of a special assessment for timeshare owners.
The most at risk properties for these cost increases are the older, non-affiliated resorts where maintenance costs have been artificially low for many years. The major timeshare developers have all ensured that the resorts have undergone regular repairs and renovations.
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