Ten Museum Park HOA Fees Increase About 36%
January 20, 2009 by Lucas Lechuga
Earlier this afternoon, I confirmed with the management office of Ten Museum Park that a significant increase in the monthly homeowners association fee was approved towards the end of December. The new monthly HOA fee, which is now in effect, increased from approximately 55 cents per square foot to approximately 75 cents per square foot. This represents about a 36% increase in monthly dues for condos owners of Ten Museum Park. This is something that potential buyers need to be aware of since I found only one or two listings in the MLS that stated the correct monthly HOA fee.
With the exception of Jade, Solaris at Brickell Bay and Emerald at Brickell, which have each been burdened with a high number of foreclosures, I can't think of another major condo development in Miami built within the past decade that has such a high HOA fee. Ten Museum Park is a boutique condo development with only 200 units, which may be where the problem lies. Most of the new condo developments in Miami have over 400 units and can divide their monthly expenses among more condo owners. While the overall monthly expenses for larger condo developments may be greater, my assumption is that the costs for condo expenses such as staff salaries, building insurance and maintenance of the condo building and amenities is proportionally much smaller.
Wow. This will surely put a hamper on sales.
Lucas – the HOA fees at One Bal Harbor were 90 cents per square foot when I was looking at this project in late 2007. Who knows what they are now. That meant that the HOA fees and taxes on a typical 2/2.5 condo were over $50,000.00 / year, a major factor in my deciding not to purchase (a good move, as it turns out).
Seriously, how can people afford or justify this? Okay maybe gym fees would avg. $100 a month for 2, maintenance costs for a pool (if you owned one), and insurance costs… but who really cares about valet parking and some of the other amenities? I would love to buy a condo, but I can’t justify the HOA fees, and this borders on obnoxious!
This is why I am deathly afraid of Miami condos… even one lands an awesome price on a unit you can still drown in HOA fees…
Not to mention special assessments. Right now, the condo. system – the market itself – is broken in Miami. And it wont be fixed until prices fall another 30% and normal people with real jobs can afford to buy. Until then we’ll see this story repeat time and again. The system is broken.
Another reason to buy a house…this kind of fee increase is insane.
A big part of it is complete mismanagement! The mgt. companies are robbing people blind with gross inefficiency and general incompetence. They have less than zero skin in the game. They don’t have any real training and if they lose contract, no big deal they go on to next suckers. It is disgusting that board members are simply to busy or it is beneath them to closely oversee boards actions. If people on board are that busy, go get your ego blast elsewhere and let somebody who really wants to do some good and has time take charge. . .. whether retiree, homemaker, etc. They routinely boost maintenance and assessments without looking in to cutting costs and ultimately put more people over top to walk away or foreclosure and then guess what–vicious cycle kicks in and maintenance increases even more. HELLOOOOOOOOOOOO–wake up and pull your heads out of you KNOW Where! You’re messing with many people’s lives!
What about the units that went unsold in this project? Do you think the management is forcing the owners in the building to cover those costs? How exactly does that work?
Lucas, do you know who the management company is? So proactive condo owners can make it a point not to have this company as manager of their building..
Just like a dividend yielding stock that cuts the dividend overnight. Expect huge stock price declines.
Government has so many rules today its almost impossible to operate a condo without the dreadful management companies. One would think the management company should be able to save the condo with their contacts with insurance companies and service companies but its Miami so its probably cost plus fee to management. A condo in Hallandale had a $200.000 estimate to paint the building but the owners were assessed $800,000 after the 80 y/o boards members all got their cut.
Any building which allows rentals will have to have a management company to deal with all extra burdens that go with rentals.
These already high HOA fees don’t include full reserves. The actual fees are higher with full reserves. At this point Miami condominiums are at the end of their ponzi scheme lifeline. You still have a few suckers supporting the system.
Wild Bill your right.. I believe there will be a big change coming with new management comapanies forming and Associations hiring thier own teams to self manage.
We need managers who work for the best interest of the owners and not their Management compainies best interest.
If a building is managed in a proactive fashion, like any other business cost should not increase by double digits yearly. The bottom line is key to health and value of that business or property. Homeowners Associations are getting screwed by South Florida Management Companies.
I believe the near future will hold downsizing of amenities in existing buildings and eliminating all together for future new development. In the last six years developers were selling lifestyles in their developments. HUGE gyms, spinning rooms, theaters, art gallery, on and on. Living on credit is GONE, living a lifestyle you can’t afford is GONE. Buying for shelter is back again.
I believe the fees went up due to the spa opening shortly. I visited the building a week ago and they were running the alarms and smoke test for the spa. However 73 cents a foot is very high. The buildings need to start making everything a la carte. Ditch the bulk cable, valet services. Let the owners and tenants pay their own way.
what is the deal with the spa at ten museum? do you get use for free, for discount or full price? other than for the developers sales pitch, what benefit does an end user get?
what would happen if you just didn’t pay the HOA fees? i know they can usually put a lien on the apt, but if you don’t need to sell it, what can they do?
An increase would be justifyable if the building was completed and delivered based upon all the promises that were sold by the real estate people, not to ention the reality that the Spa..the lavish spa that has not been completed even a year after it had been promised by developer is only a fraction of what it was supposed to be….oh the list goes on and on…Water wall??? outdoor cabanas?? Michael Capponi lounge…Common people get a clue you get nothing, Nada Zip….and what about the commercial spaces since there are no tennants how withh those fees be assessed?? For more you’ll have to wait for my next post…
Let them eat cake.
The Smart Money
VR
for starters, foreclose on your ass.
“You know, I never feel comfortable on these sort of things. Victims? Don’t be melodramatic. Look down there. Tell me. Would you really feel any pity if one of those dots stopped moving forever? If I offered you twenty thousand pounds for every dot that stopped, would you really, old man, tell me to keep my money, or would you calculate how many dots you could afford to spare? Free of income tax, old man. Free of income tax – the only way you can save money nowadays. “
What is happening at Ten Museum Park just doesn’t seem right. Makes me realize how important an efficiently run HOA really is. I would not be a happy camper if I owned there. I’m sure a lot of the renters can expect a raise in rent when they renew as well.
Question to all south Floridians out there. I have the option to continue to work in Miami OR start working in our downtown Fort Lauderdale office. While both cities are unique and offer a different lifestyle, I’m wondering what others think about living in downtown Fort Lauderdale.
Also, what real estate has more promise, downtown Miami or downtown Ft Laud? The Miami market seems saturated and there is so much inventory. I can’t see how downtown Miami real estate can provide a decent return anytime in the near future. This is why I’m very hestitant to buy this year or even next. Is downtown Fort Lauderdale as overbuilt and empty as Miami? I cannot seem to find a decent blog related to FortLaud. Lucas, what are your thoughts as well?
“I can’t see how downtown Miami real estate can provide a decent return anytime in the near future. ”
–
“I don’t think there will be a return journey, Mr. Frodo.”
Since AJ has property in NYC, could you please provide some insight as to the HOA cost in buildings up north? more or less per sq ft than Miami?
what are these voter things on each post
What’s the highest HOA fee’s can go is there a cap?
I think the cap is set at infinity + 2. In all seriousness, there isn’t a cap. Property values will suffer as HOA fees increase. It’s up to the condo board or management company to control expenses.
Most of the luxury condo buildings in South Beach have HOA fees of around $1.00 per square foot. Much of that has to do, however, with the higher cost of insuring a condo building located on the beach.
Lucas
using that logic why would insurance on a brickell building right on the bay be any less then a sobe building? same concept, right? or for that matter, same flood zone?
i’m not surprised by this raise…in due time, all the new building on the mainland will be 60 cents or higher. TMP is an alright building…expect to see some major foreclosure action in the 2/2s with this increase. you’re mnt and taxes alone are coming close to what you can actually rent the place for going forward in this market.
Gables:
My HOA in Soho, NYC is $.40.
It’s called “common charges” in NYC and, true, we have no valet or spa or gym. Thank God.
I would imagine HOA fees in NYC are much lower on average than in Miami. No pool or fancy landscaping to maintain, no valet, much lower insurance, etc, etc.
Unfortunaltey, it’s a BS sca..yess..there water bill, trash, common areas, insurance, electric commmon areas, maint, security, tc..but that doesnt add up when you’re fees are so high.
My taxes and HOA is more than my mortgage!!
I say al this needs to change the laws were written back then and need to be changed. All this BS valet, xtra staff needs to be cut. slashed. That’s it!
It’s not worth it to me and I don’t use any of these amenities rarley. I could hire my own personal asssistant for the amount of HOA fees I pay.
I think the ufortunate things is that homeowners don’t have time or don’t want to deal with the probs of an entire building . Usally, board metings go unattend cause o flack of intrest cause no one wants to deal with it. So it’s outsourced to the mng companies who rip us all off and then we entrust them to handle.
It comes down to making the tough chooices do we need valet, etc.. do we need a cleaner every day instead of evry other day, etc..
U gotta cut…eveyhting is going down in stored 30% – 50% gas is down, etc..yet HOA fees are higher. all contracts need to be renegotiated. Cause if they don’t want to lower prices then some other co will do it and prob better. Maybee u dont go 4 the cheapest bidder but the low to mid vendor.
Either way there needs to be HOA change policies.
I just Googled the subject and earned, to my surprise, that common charges average $1.22/sf for non-doorman buildings, $1.44/sf for doorman buildings and go up to $3/sf for super luxury buildings. One article said the days of $1/sf common charges are as long ago as the nickel candy bar.
Hi Gables,
I live in a 700sq ft 1-bedroom near Union Square in New York…it’s a luxury building with full staff, doorman, roof terrace, gym ,etc. The HOA is $1.25 per sq ft.
Also meant to say that in NY many buildings are co-ops and the HOA includes your property taxes…the $1.25 I quoted does included those taxes.
Just an Observer:
But if you’re referring to co-ops in NY (as opposed to condos), the HOA (“monthly maintenance charge”) also includes each owner’s share of the debt service on the underlying mortgage (on the building – as opposed to the mortgage on the unit/shares of the co-op) as well as its share of the property taxes on the building as a result of which we’re really not talking apples to apples with Miami’s HOA (which includes neither property taxes nor debt service on an underlying mortgage).
Hi Samson,
Yes, exactly…that was my point in making clear that the $1.25 per sq ft I pay in NY (and that includes taxes for my co-op) is quite different from the typical condo HOA that would exist in Miami.
Developers often set HOA fees extremely low. Low fees lure buyers, and more people qualify for mortgages.
Once its handed over to the owners, they new management discovers the fees were way too low. There was no budget for reserves. The developer was paying for landscaping and personnel out his own budget. etc. etc.
So then HOA is forced to raise fees and look like the bad guy. Developer will just say previous budget was an estimate and will be long gone.
Happens all the time.
Its hard to run a luxury high-rise building for $0.55 cents. After awhile, it will look like the ghetto and have no money in the bank.
I wonder if they voted in reserves or not…..would seem really bad if they voted out reserves……. Nice to be a renter.
I would guess that the most “probable” reason for the big increase is that there are not
enough of the 200 units occupied and paying the fee. That’s the risk with these new
buildings with lots of foreclosures/empty units.
My full service building in London (Resident controlled by a Board who own flats in a 2004 building but we have an external manager whom we control very tightly) runs at 32p per sq ft per month. We don’t really view things in the price per sq ft per month – but that’s what it works out at.
We have 24 hr concierge, lifts (elevators) etc. There is no pool or spa.
I cannot fathom how badly run, and how over the top the services provided are, to rack up the costs I read here. Does anyone have any concept of what a ridiculous notion that even the majority of nice buildings designed for residential living should have some of the amenities discussed here.
These are not 5 star hotels and the sooner people kick the habit of thinking that it is ‘normal’ or ‘expected’ to live in residential accommodation that resembles a hotel, and NOT EXPECT to pay silly HOA charges, the better.
Incidentally, between taxes and HOA, the entire basis of a rebound in residential real estate in South Florida is impossible in my view. I laugh at a debate where rentals barely cover expenses, never mind mortgage/cost of capital. Ridiculous.
On the question of property tax assessments, what is the tax appeal process like in Dade County? In the case of new buyer paying a much lower price, and who can present his closing documents to the assessor, does the County respond with a timely new assessment?
Also I am reading your terminology about o1, 02 sight lines. What does this mean?
As an outside observer perhaps interested in this market, there just doesn’t appear to be enough distressed foreclosure sales or serious short sales to effectively clear the market.
You need real people living in these units even if it is only half a year, not empty speculator holdings and see through buildings. Apparently speculators are still making fast bleed payments on empty units?
Next question, how many new units are being finished in 2009 in the downtown, Miami Beach area. Is anybody actually still breaking ground?
When I first started looking into Miami listings recently, I would have expected many more serious sellers. Instead it looks like fantasy, manna from heaven land. Sellers hope to find that one dumb buyer nonsense, or pray that some how this market turns overnight. Leads to my final question, before I waste more time investigating Miami: will the other sellers (non-REO) with inflated price listings accept cash low ball bids 20-30% lower?
Sup guys,
enjoying my 85 degree wx on the beach. Not into major posting while I’m on vacation. Just skimmed through a lot of previous posts.
gables,
I pay 0.52 for SOBE
0.42 for downtown
1.22 for NYC co-op (includes taxes) with Pool, gym, doorman, concierge etc.
0.02 cents/sf for my overseas beach properties!(no insurance included)
Miami buildings are like luxury hotels. They are higher to maintain and insure than NYC apts. That’s life. Just look for well managed buildings to buy. I completely agree with Mr. Waverly, throw the management companies out and self manage and save almost half the costs. This is not for every building but only with residents who are like smart and willing to save a buck.
75c sq/ft is ridiculous, I mean absolutely ridiculous. The owners of these buildings that have these high HOA fees should really get together and figure out a way to cut costs and to get a new mgmt company. I know of some really high end buildings in the hallandale/hollywood area that have full service, exceptional amenities and they are paying 62c sq/ft. And this year the HOA went down, its all in the mgmt company. There is no logical reason that a run down building like TMP is charging that.
Lucas,
would you please try to get the details on HOA fees. My understanding is that due to the spa opening they will allow the building to operate as a condo hotel which means that if someone comes for a week to take the number of spa treatments they will live in the building in furnished units and obviously charged almost like hotel fees. At least that was an idea from the very begining when the building was ready to open.
If they generate enough interest from the spa goes from other cities it might change the whole cash flow picture.
Most Miami high rise buildings average 60-70% occupancy, with many units used for second homes.
Look at the lights in most of these building, the higher the level of luxury the fewer the lights.
If these buildings were running at 100% full time occupancy how high would the monthly fees run?
Management Companies are scamming Association with added staff (and the premium paid on each employee).
A good self managed building, actually paying the Manager more with bonuses could probably trim 15-20% from the bottom line.
Mr Waverly said: “Look at the lights in most of these building, the higher the level of luxury the fewer the lights.”
– So true….so true.
75c is not cheap but it could be alot worse compared to some other buildings. The Bentley Bay on south beach has HOA at $1.039 per square foot.
The Emerald at Brickell has HOA at $1.15 per square foot.
74¢ @ The Mark
Includes valet. Most apts. have 1 space plus one right to “free” valet.
Easiest guideline to judge if a building is well maintained is to check the elevator inspection sticker inside the cab. If it’s expired or missing the management and board are not doing their job. If it’s way past expiration the building might have a existing violation that has not been fixed. This will be in my book, Dummies Guide to Buying a Miami Condo.
Chapter Six: Low maintenance fees don’t mean anything. Especially is somebody brags about it on a blog. The building with the lowest fees most often has no reserve budget.
Reserve budget was fully used up @ T M in 05-07.
Regular reserves were accumulated in 08 and are built into 09 fees.