Category Archives: BoB Series: Buyer’s Notes

Buyers in new construction condominiums get so caught up with the hype of the new building that they forget to read the condominium documents and budget and expect maintenance fees to remain at the same level that the developer provides during the onset. This can lead to a crisis for the individual unit owner. Maintenance fees can quickly soar to the level of rent pay for a sizable apartment. In some cases $900 and up per month on top of your mortgage payment. Almost every new construction project has their operational budget drafted by a management company or consultant well in advance of the building being topped off. This means that the budget might not reflect operational circumstances during occupancy.

The operational budget determines what the unit owner will pay in monthly maintenance. If the operational budget allocates $1,500 for electricity per month but the bill is actually coming in at $2,400 per month, then you can expect for there to be an amendment to the budget and increase in your maintenance. These increases can be substantial and come with little warning. There have been several instances where developers have had such poorly drafted budgets that they end up in a budget deficit when the project is completed. The resulting calamity leads to all the unit owners being required to pay for the budget deficit by special assessment. A special assessment is an unplanned maintenance payment aside from your regular maintenance assessment. In cases like this, a unit owner should request that an audit of the developer controlled association be completed prior to paying.

With foreclosures at record highs, many buyers with tight personal finances are planning on flipping or renting their unit. The problem is that if there is a special assessment or if maintenance fees get hiked, the buyer still has to pay and there will be no payment plan except what the Association determines. An unprepared buyer can quickly find themselves in a tight spot with their property at risk. Keep in mind, not paying maintenance means the Association can foreclose on your property, so having contingency funds set aside for probable maintenance increases and special assessments is the best way to protect yourself and home from loss. The Daily Business Review has an incredible article that further illustrates the problem with unpredictable maintenance costs.

Terraces are viewed as secondary to the unit interior. Buyers focus their attention on the bedrooms, master baths, kitchen, etc. Often times, when considering a unit’s value, the terrace is not even factored into the unit’s actual living area. The value potential of a terrace is often ignored. The problem is that many developments have shallow terraces. A shallow terrace is 5ft wide or less—more or less the width of a sidewalk. If you buy a unit, say on the 32^nd floor of a high rise and your terrace is 5ft. wide, then there are limited things you can do with and on your terrace. You basically own a mid-air frighteningly narrow sidewalk on the side of the building. You might be able to place a measly couple of chairs; certainly not a table. Although many of your home’s guests won’t mind the shallow terrace, there will be many that will feel uncomfortable being out there, especially if you are high up. One doesn’t want to step out into the terrace and feel as if they’ll fall if they make a wrong move.

What people fail to recognize is that in a high rise a terrace can offer great potential to the unit owner if the terrace is deep. A deep terrace is 6ft in depth or more. Having a terrace on the 32^nd floor that is 7ft in depth, for example, will allow the owner to place a small outdoor sofa or even a table. There are people who will place a jacuzzi in their deep terrace. When this is the case, the terrace is as much of a living area as the A/C cooled interior. It serves as a sort of spacious private observatory deck. Frankly, I like being as high up the tower as I can afford, but if I have to pick between a unit that is situated higher with a shallow terrace and a unit in another building that is lower but with a deep terrace, I might be compelled to pick the latter.

What if you want to do more than stand in your terrace? What if you want to walk around your outdoor chairs without squeezing against the railing? What if you want to sit down at a table and play dominoes while enjoying your beautiful view? If your terrace is shallow, then your ability to do any of these is hindered. There are hybrid terraces that are both deep and shallow. These are the best because they offer all the versatility of use that a deep terrace has and the roaming space that a long shallow terrace has. There aren’t many projects that have these types of terraces. They tend to be high end. Low rises often have poorly proportioned terraces. In this respect they are at a disadvantage to high rises.

Let us take a terrace from a unit at the Opera Tower and compare it to one from the a unit at Brickell’s Emerald Condo. The Opera Tower, which is significantly taller than the Emerald, features long but shallow terraces at 5ft in depth. They offer plenty of space to pace but not play. There isn’t sufficient room for a table and several chairs. Placing a table will block one’s access to the other side of the terrace not to mention make it look cluttered. The Emerald has deep terraces at 23ft. This allows ample space for outdoor furniture, plants, chairs, and damn it, even a jacuzzi if the condo docs permit it. Although the Opera Tower offers higher altitude units with more expansive views, the Emerald offers lower altitude units with more desirable and usable deep terraces.

Buying in a high rise is special because one has the opportunity to go vertical. In consideration of this, the terrace should be an important factor in the purchasing process. Deep terraces offer more uses and are more comfortable. Putting aside whether there are glass railings or steel, or if the terrace is wrap-around or straight, the depth of the terrace is the most crucial of the desirability factors. Having a deep terrace means having your own private and spacious observatory deck—a claim few can make in single family and low rise residences.

When considering a new condominium purchase, it is easy to get swayed in the direction of a high rise. You know, 30+ floor developments, because like the Jeffersons, you want to move up in to that deluxe apartment in the sky. The problem is that since you’re spending thousands of your hard earned dollars on this purchase, it is important to open your mind to all options. That means low rises have to be looked into.

There are certain unappealing perceived problems that low rises come with that are hard to ignore, for example, the loudness that accompanies being near street level. Drivers honk, sirens blare, city buses roar, and people chatter, especially in the city and beach. So, being high up in the air seems like a good idea. However, many low rise developers have risen to the challenge: hurricane impact resistant sound-proof glass. This high tech glass is not only quiet but as a safe as up-to-code shutter systems and is laid out elegantly in floor to ceiling form for most competitive loft projects. Low rise loft developments are no longer uncomfortably loud. Lack of privacy is another issue. Being close to the street means people might be able to look into your unit or see what you do on your terrace. For all you unruly folks, that means no lascivious or illegal activities can take place on your terrace. This issue is unavoidable and can only be remedied with tints or blinds. There are other problems, however. In a low rise, don’t expect on having a great view. This is hard to dispute in comparison to its high rise counterpart. Being 220 feet in the air tends to increase your chances of having a decent view. Being 45 feet above the ground poses a distinct disadvantage, but many low rise developments make up for their less than spectacular views by being ideally situated.

Location, after all, is the single most important factor in determining a property’s value. If you are well situated, an average city view will do just fine—especially if your building’s features are extraordinary and unit layout ingenious. Many low rise developments do just that; focus on both. As you would expect from a smaller scale project, there is a high degree of attention to detail; building materials, unit features and layouts, space concepts, technology, and building aesthetics. For a good example of this let us look at one South Beach low-rise development: West on Twelfth.

The Borges + Associates designed West on Twelfth low rise loft development has 29 units. The high-end low rise features a biometric finger print access system. Each unit features an interactive touch-screen panel that controls lighting, audio, surveillance, and climate control from anywhere in the world. This system is similar to the Related Group’s I.R.I.S. touch screen panel in 500 Brickell. The lobby is open air with 16 ft. high ceilings, translucent tinted glass panels shipped from England, and humidity absorbent stone floors. Standard units have 9’ 4’ft high ceilings. The penthouse has 18 ft. high ceilings. Penthouse units feature rooftop outdoor Roman tubs with independent gas grills. The master bathrooms are finished in marble and feature floor-to-ceiling glass walls. Furthermore, the unit kitchens feature state-of-the-art Sub-Zero and Bosch appliances. The building has the customary Zen garden and a unique rooftop pool. There is no concierge or valet on the property. The emphasis is on the unit furnishings and building features—no fluff. This also means that maintenance fees for the buyers will be more controllable. The project, as you would expect, is located exceptionally well—in the heart of South Beach within blocks of Lincoln Rd.

Low rises like Twelfth on West afford prospective buyers many details that high rise developments don’t. These features are unconventional and refreshing. High rise developers have a much higher construction cost and cannot afford to emphasize material quality as much as a lower density project—unless prices are hiked up significantly. Furthermore, a high rise development will usually have lower ceilings in order to accommodate a higher quantity of units. There is less control over maintenance hikes in high rises and association affairs tend to be much more complicated. For these reasons and more, low rises merit your attention.

The project is located on West Avenue and Twelfth Street on Miami Beach. Sales are being handled exclusively by Jeff Morr’s Majestic Group. Reservations just began. Prices start at $400k and go up to $700k.

Note: Touch screen and finger print access images are not actuals.