Ray McMillan is especially unhappy the condo’s reserve fund must be filled so quickly. Tim Stepien/The Coastal Star
‘Everything paid up’ — but more expense on way
Also in the special report: Condo costs: A sudden storm| Highland Beach — Coronado|Boca Raton — Mayfair
By Brian Biggane
While Ray McMillan describes himself as a conservative Republican, he’s not at all happy of late with Gov. Ron DeSantis and the state Legislature.
For him, that body’s decision to pass a bill requiring condominiums three stories and higher to fill their reserve fund in two years’ time was a bit too much. It coincides with a mandated recertification process by the end of this year, as well as dramatic increases in property insurance, a triple whammy that is creating financial hardship for many coastal residents.
McMillan said the reserve fund issue should have been spread out over more years, not just two.
“It’s a shame,” said McMillan, a resident of the Southgate condo in South Palm Beach and a member of the Town Council. “I don’t know what DeSantis was thinking by rushing to pass this legislation.”
In one sense, Southgate was fortunate. An engineering inspection required by the recertification law determined few repairs were needed, the most significant a $40,000 roof job covered by the general fund.
Nonetheless, the board of directors determined that maintenance fees would need to rise from $910 to $1,672 per month, an 84% increase. And the board billed residents of its 129 units a $5,036 special assessment that was broken down into five installments of a little more than $1,000 per month.
“So we got everything paid up by the first of January,” McMillan said, “and we weren’t even two weeks into the month when we got a notice from the insurance company that there would be an increase of like 30%” for next year.
“Next year, who knows what they’re going to do? Maybe (the assessment) will be $15,000 per unit.”
Built in 1974, Southgate has the same issues of every high-rise condo that’s been around that long. Foremost this year was replacing one of the elevators in the three buildings; that was done, but now another is requiring frequent attention.
Southgate HOA President Stacy Buckley said other repairs are already on the horizon.
“We anticipate and will be collecting funds over the next few years for new roofs, balcony and concrete restoration, and painting,” Buckley said. “Very similar items to many of the condos on A1A which are of similar age.”
As younger buyers with deeper pockets buy into the coastal market, some condos report demands for amenity upgrades such as pickleball courts and jacuzzis. Another resident,
Elva Culbertson, said that hasn’t been an issue at Southgate.
“The people who are really well-off aren’t coming to Southgate,” she said.
The real estate website BEX Realty last month listed 13 Southgate units for sale, compared with only four at the newer Palm Harbour building just down the road.
While Buckley said she believes many of those who have put their units on the market are “infrequent users (who) find the fee increases as a reason to sell,” McMillan said his conversations have said otherwise.
“She might be talking to different people, but the people who have been talking to me have been long-timers. Everybody I’ve talked to has not been happy.
“People are frustrated, but a lot of them have enough of a nest egg to cover it. But a lot of people are like, ‘No, I’m getting out of here.’”
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