Buyers Of Condo Conversions In Aging Buildings Beginning To Have Nightmares

In South Florida, the Miami Herald reports:

• Their first home should be their joy. But Michelle Fernandez and her fiancé, Efrain Uribe, are bitterly regretting buying a place from a developer converting a high-rise apartment complex into condos in North Miami Beach. Now, they say, they're stuck with shaking elevators, exposed pipes, badly stained hallway carpets, a flooded laundry room and even mold in the couple's air conditioning closet.

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• Others who have bought condo conversions have discovered they're on their own to fix code violations, an aging infrastructure and faulty equipment. In some cases, that means the new condo associations are levying thousands of dollars in special assessments for repairs.

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• Some new owners complain cities don't find code violations in converted buildings until after the developers have sold all the units, says state assistant condo ombudsman Bill Raphan. In fact, some developers did little more than cosmetic work while converting aging apartment buildings, he says.

• One woman [said] that she had to take out a $15,000 line of credit to pay a special assessment for repairs after she moved into her converted unit -- only to discover that her new condo association was planning another assessment to cover more work.

Once the condo owners in these old buildings (at least those who financed 70% or more of the purchase price) figure out that they now have little or no equity to salvage in their units, I suspect many will opt for "mailing in the keys" to the mortgage holder rather than having to foot the bill for stiff repair assessments. The mortgage holders will once again be left holding the bag; my condolences to those unit owners who paid cash.

For more, see New condo conversions bring broken promises (Unhappy owners are complaining about units in disrepair and faulty equipment) (when link expires, try here).

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