New milestone inspection and reserve study requirements have triggered a wave of forced repairs and special assessments, strangling condo values across coastal Florida, according to a veteran Tampa Bay real estate professional.
The regulatory response to the 2021 Champlain Towers South collapse in Surfside may have inflicted more harm on Florida’s condo market than the tragedy itself, argues Mark Hartman, team leader at Charles Rutenberg Realty, who has spent over two decades in the Tampa Bay market. Hartman says Florida legislators passed sweeping regulations without considering the economic fallout for thousands of condo owners. “The Florida Legislature overreacted to the building collapse in South Florida,” Hartman says. “The requirements for milestone inspection reports and reserve studies have created a strain on the condo market.”
That strain, he adds, was made worse by the hurricanes that hit Pinellas County in 2024, creating a compounding crisis that has changed the economics of condo ownership for many Floridians.
Mandatory Repairs and Assessments Hit Owners Hard
Hartman points to a central flaw in the post-Surfside regulations: the automatic requirement to perform repairs and make disclosures after milestone inspections, regardless of whether the identified issues pose an immediate safety threat. Engineering firms conduct these inspections and file reports that trigger mandatory repairs, even for minor deficiencies.
“Once the report was filed, it may or may not have been structurally significant in some of these buildings, but because of the requirements, disclosure requirements, and so forth, they were obligated to make these repairs,” Hartman explains. “And so a lot of condos were faced with that, along with the increased insurance.”
This system has led to a cascade of special assessments and rising monthly fees throughout coastal Florida’s condo communities. Buildings that could have operated safely for years with modest maintenance are now forced into costly repairs and reserve funding. Many owners, especially retirees and fixed-income residents, cannot afford the sudden financial demands.
As a result, condo values are declining—not due to structural problems, but because the cost of regulatory compliance has become unsustainable for many owners and has deterred prospective buyers.
Investors Who Sold Early Fared Better
Hartman says he began warning investors years ago about the coming regulatory wave. “I advised a number of my investors that I was working with, particularly sellers that held several properties in their portfolio, to actually sell or liquidate before the transition, because I could see the storm clouds building on the horizon with respect to the milestone inspection report requirements as well as the reserve study requirements.”
Some followed his advice, selling off condos at peak prices after the COVID-19 boom. Others held on, hoping the market would continue to rise or that regulatory impact would be minimal. Those owners now face a difficult choice: accept much lower sale prices or hold through a downturn with rising carrying costs.
Hartman recalls advising one institutional investor who owns entire condo communities. “He was stubborn, like a lot of them. I advised him before the transition of the market to sell when the market was at its peak,” Hartman says. The investor sold some units but kept many, expecting continued appreciation. Now, with buyer demand dried up and costs rising sharply, those properties are losing value and generating mounting expenses.
Timing Was Possible—For Those Who Paid Attention
Hartman acknowledges that perfectly timing a market is nearly impossible, but says clear warning signs were visible for those willing to look. “No one ever knows conclusively if you’re at the very zenith, the pinnacle of the market,” he says. “But there are certain indicators that give you a good idea as to whether or not you’re close to the top or close to the bottom.”
For Florida condos, those indicators included the timeline for new regulations, rising insurance premiums, and the unsustainable pace of post-pandemic price increases. Investors who tracked regulatory changes and understood the financial impact of mandatory inspections and reserve studies could see the risks ahead and make informed decisions.
In contrast, owners who relied solely on recent comparable sales and ignored regulatory trends are now facing steep losses and a far more demanding selling environment.
Florida’s Experience as a Warning to Other States
Hartman argues that Florida’s regulatory response should serve as a warning to other states. When lawmakers react to disasters with broad, inflexible rules, they often create new, systemic problems that ripple far beyond the original incident.
The Surfside-inspired rules were supposed to protect residents by ensuring structural safety. But Hartman says they have instead accelerated a decline in condo values in some areas by imposing costs that often exceed the actual risks present in many buildings.
For states considering similar regulations in response to building failures or natural disasters, Florida’s experience shows the importance of targeted, risk-based policy. Overly broad mandates may win political points but can inflict long-term damage on property markets and owner finances.
Will the Market Recover?
The outlook for Florida’s condo market remains uncertain. Hartman believes recovery is possible, but says it will depend on several factors: the trajectory of interest rates, insurance costs, property tax changes, and—most importantly—whether the regulatory burden is eased or remains in place.
For now, the condo market in coastal Pinellas County is under heavy pressure from a regulatory system that Hartman and many other professionals say was poorly aligned with the risks it was intended to address. Whether state lawmakers will revisit these rules or leave the market to absorb the costs remains an open question. Until then, Florida’s condo owners face a landscape where compliance costs, not structural risks, are driving values and reshaping the market itself.