Condo owners hit again as Citizens requests 14.2% rate hike

Condominium owners already dealing with rising assessments and association fees could be hit again if Citizens Property Insurance Corp. gets its way.

The state-run property insurance company has asked for permission to raise the rate on condominium units by an average of 14.2% starting next year as part of a proposal for hikes on its policies.

If the state’s Office of Insurance Regulations greenlights Citizen’s request, the average cost of a policy would go up 14%, with home policies rising 13.5% along with the jump for condo units — as well as for renters and mobile home policies.

Citizens says the rate increases are necessary and “impacted by recent legislative reforms, reinsurance costs, and Citizens’ ongoing effort to charge actuarially sound rates.”

If the rate hike is approved condominium owners will once again be forced to take on additional costs due to decisions by state officials.

That is largely due to recent state laws aimed at making condominium buildings safer after the June 24, 2021, collapse of the 12-story Champlain Tower South in Surfside.

The laws that were passed require milestone inspections for condominium buildings more than 30 years old and that condominium associations have enough money in reserves to repair structural problems that may arise as well as to take care of deferred maintenance.

That money is coming, or has to come, from owners, many of whom are seniors that bought units years ago because they were less expensive to own and maintain. But with the new regulations and the number of units in the state older than 30-years-old topping, by some estimates, 900,000, the days of a small condo being a cost-effective alternative is no longer a reality.

That's left many of these condominiums owners unable to afford to live in their homes and with little choice but to sell their units at a drastically reduced price and enter a housing market they can’t afford.

Beyond the immediate impact to the individual owner, the rising costs are beginning to hurt the condo market as a whole as people begin to sell off units.

Earlier this month, Greg Main-Baillie, a project manager who works with condominium associations for the commercial real estate firm Colliers, told the Business Observer that listing prices for units were “significantly discounted” as owners hit with high assessments and HOA fees look to unload.

According to Citizens, it has 1.19 million policies in force as of May 31. The number has stayed relatively steady in the past 22 months after beginning to spike in early 2022 as the number of companies writing in the state began to drop.