Selling A Florida Condo With A Special Assessment

Your association sent a letter. There’s a milestone inspection, or a structural integrity reserve study, or a $40,000 special assessment, and your monthly dues just went up by hundreds of dollars.

You’re not alone, and this is not a normal market cycle. Florida changed the law after Surfside, and the bill is arriving now.

What actually changed

Milestone inspections

Under Fla. Stat. §553.899, condominium and cooperative buildings three stories or more must undergo a structural milestone inspection at 30 years (25 years within three miles of the coastline), and every 10 years after.

If Phase 1 finds substantial structural deterioration, a Phase 2 inspection follows, and required repairs must be made on a defined timeline.

Structural Integrity Reserve Studies (SIRS)

Under Fla. Stat. §718.112(2)(g), residential condo associations with buildings three or more habitable stories must complete a SIRS. Most owner-controlled associations had to complete their initial study by December 31, 2025, with limited coordination allowed alongside a milestone inspection through December 31, 2026.

The SIRS covers eight mandatory components: roof, load-bearing walls and primary structural members, fire protection, plumbing, electrical, waterproofing, windows and exterior doors, and any other item with deferred maintenance or replacement cost over $10,000.

The part that hits your wallet

Associations can no longer waive reserves for those SIRS components. The ban applies to budgets adopted after December 31, 2024, and full reserve funding had to begin by January 1, 2026.

For decades, many Florida associations kept dues artificially low by waiving reserves every year. That option is gone. The money has to be collected now - through higher dues, a special assessment, or both.

And it affects insurance

Under HB 913, Citizens Property Insurance is prohibited from issuing or renewing policies for condo associations or unit owners unless the association complies with both the milestone inspection requirements (§553.899) and the SIRS requirements (§718.112(2)(g)).

So a non-compliant association can leave every owner in the building unable to get coverage - which means unable to get financing, which means unable to sell to anyone but a cash buyer.

Why your unit may be hard to sell right now

Lenders are scrutinizing Florida condos hard. Fannie Mae and Freddie Mac maintain lists of ineligible/unavailable projects, and buildings land on them for deferred maintenance, insufficient reserves, significant deferred structural repairs, or pending structural litigation.

If your building is flagged, conventional financing is unavailable to your buyers. FHA and VA approval have their own requirements. The practical result: your buyer pool narrows to cash.

Ask your association directly:

• Is the milestone inspection complete? What did it find?
• Is the SIRS complete? What does it require?
• Are reserves fully funded per the new rules?
• Is the building on the Fannie Mae unavailable list?
• Is there pending or anticipated litigation?

Get answers in writing. Buyers will ask, and if you don’t know, deals die at week three.

What you must disclose

Florida condo sales carry statutory disclosure obligations beyond the general Johnson v. Davis duty.

You must provide the condominium documents - declaration, bylaws, articles, rules, and the current financial information - and the statutory condominium disclosure. Buyers have specific statutory cancellation rights tied to receipt of these documents.

Disclose specifically:

• Any levied special assessment, whether or not it’s been paid
• Any assessment that’s been discussed, voted on, or is anticipated - a known future assessment is material even before it’s formally levied
• Milestone inspection results, including Phase 2 findings
• SIRS results and the funding plan
• Current and projected dues increases
• Pending litigation involving the association
• Any building insurance issues or non-renewal
• Your own account status - unpaid dues or fines

Hiding a pending assessment is a fast route to a lawsuit. The association’s records are discoverable and the buyer’s estoppel letter will surface it anyway.

Who pays the assessment

Negotiable, but the default matters. The FAR/BAR contract addresses this: generally, assessments levied before closing are the seller’s responsibility, and those levied after are the buyer’s - but the allocation is contract-specific and frequently negotiated.

For a large assessment, common outcomes:

• Seller pays it in full at closing
• Seller credits the buyer a portion
• Price is reduced by some or all of it
• Buyer assumes it (typically with a corresponding price reduction)

The estoppel letter is what controls at closing. Florida caps the fee at $299 for a standard estoppel (Fla. Stat. §718.116 for condos, §720.30851 for HOAs), with extra allowed for rush or delinquent accounts. Order it early - surprises here blow up closings.

Can the association take your unit?

Yes. This is important and it’s different from code enforcement liens.

Unlike a code enforcement lien - which cannot be foreclosed against homestead - a condo or HOA assessment lien CAN be foreclosed against homestead property in Florida. Associations do this regularly.

Under Fla. Stat. §718.116 (condos) and §720.3085 (HOAs), unpaid assessments become a lien, and the association can foreclose. Homestead protection does not shield you.

If you’re falling behind on dues or can’t pay an assessment, this is time-sensitive. Talk to the association about a payment plan before it becomes a lien and then a foreclosure.

Your options

Pay the assessment and sell normally. Cleanest, if you can fund it. A unit with the assessment paid and a compliant building sells to financed buyers at full market.

Sell and negotiate who pays. Common. Expect the buyer to demand a credit at least equal to the assessment.

Reduce the price and disclose fully. Legal, transparent, and often the practical answer for a large assessment on a smaller unit.

Sell to a cash buyer. No lender means no condo project review, no Fannie Mae list problem, no insurance contingency. This is often the only workable path for units in non-compliant buildings.

Rent it out. Check the declaration first - many Florida associations have adopted rental restrictions, minimum lease terms, and caps on the number of rented units.

When cash makes sense here

It does when your building is on a lender-ineligible list, the association is non-compliant with milestone or SIRS requirements, the assessment exceeds your equity, the association is in litigation, or insurance can’t be placed.

It doesn’t when the building is compliant, the assessment is modest, and you can pay or credit it. Then list normally - you’ll net considerably more.

The honest reality for older Florida condos

If you own in a 1970s or 1980s three-plus-story building that deferred maintenance for decades, the value of your unit may be genuinely lower than it was in 2022 - not because of the market, but because the true cost of the building finally got priced in.

That’s painful and it isn’t your fault. But waiting rarely helps: assessments in these buildings tend to compound, and each one further narrows the buyer pool.

If you’re going to sell, the market for these units generally gets harder, not easier, as more buildings complete their studies and more lenders update their lists.

Frequently asked questions

Can I sell a condo with a special assessment in Florida? Yes. You must disclose it, and you’ll negotiate who pays. Cash buyers are often the practical option in non-compliant buildings.

Who pays a special assessment when a condo sells? Negotiable. Generally assessments levied before closing are the seller’s; the FAR/BAR contract and the estoppel letter control.

What is a SIRS? A Structural Integrity Reserve Study, required under Fla. Stat. §718.112(2)(g) for residential condo buildings three or more habitable stories, covering eight structural components.

Can an HOA or condo association foreclose on my homestead in Florida? Yes. Unlike code enforcement liens, association assessment liens can be foreclosed against homestead property.

Why won’t lenders finance my condo? Likely the building is on a Fannie Mae/Freddie Mac ineligible list due to deferred maintenance, insufficient reserves, structural findings, or litigation.

Do I have to disclose an assessment that hasn’t been voted on yet? If you know it’s coming, yes. Anticipated assessments are material.

What is the milestone inspection deadline? Buildings three stories or more must be inspected at 30 years (25 within three miles of the coast), then every 10 years, under Fla. Stat. §553.899.

How much is an estoppel letter in Florida? Capped at $299 for a standard request, with additional amounts allowed for rush or delinquent accounts.

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General information about Florida condominium law, not legal advice. Milestone and SIRS requirements have been amended repeatedly since 2022 - confirm current deadlines with a Florida community association attorney and your association.

Beach Bums Real Estate buys condos for cash in Orlando and Central Florida, including units in buildings lenders won’t finance. Call (689) 249-4888.