Champlain Towers Analysis

There’s a lot being written about the Champlain Towers collapse, but perhaps, as a former owner of a beach-side unit just twenty blocks south and as a lawyer with some experience as both an owner and with Florida law, my thoughts might be a little more than just informed speculation. Or not.


The developer died seven years ago and his company was dissolved shortly thereafter. Because of the age of the building, decennial liability is no longer an issue. There has already been one lawsuit filed and many more are rumored to be on the way. What do you call a lawsuit against someone with no assets? A waste of time.

The homeowners’ association owns the common areas of the building; the unit owners hold their individual units. The value of all the remaining condominiums just went to zero. The destroyed condominiums don’t exist any more. The sister buildings are not part of the HOA; except for safety issues, they might as well not exist. The HOA thus has no assets; their only reasonable move is to file for bankruptcy. This halts all litigation; the bankruptcy court appoints a trustee, just like with Eastern Airlines or Bernard Madoff Investments, and looks for any assets to cover debts. But he won’t find much, because…


The remaining portion of the Champlain Towers will be condemned and torn down. There probably is a way to rebuild the building and make it safe as long as the collapse was not due to saltwater intrusion or shifting soil. We already know that the building was sinking at the rate of 2 mm per year. The repairs to the building to make it safe before the collapse came in at 9 million; now the bill will be much, much higher.

It will be months before a building permit is issued if that is the direction the HOA wants to go but more importantly, who will pay? The HOA just lost at least half of its “taxpayers,” there are fewer owners remaining on whom to place an assessment. I would also guess that at least some members of the board are dead; there will have to be a new election; there is probably nothing in the condo association agreement to cover a situation like this.

That is another reason why it bankruptcy is important; the trustee can decide whether it is commercially viable to restore or demolish the remaining structure. The risk of certifying the existing building and the land on which it sits as safe is so great that I doubt the city/county would do it and even if they did, no one will insure the building now. The remaining residents–all of whom who will have to move out–will try to get State of Florida assistance but that will take months and there is little legal basis to help them unless the State decides to underwrite building collapses generally.


My instincts tell me that there was no insurance for this kind of event, but I have reached out to an insurance professional for confirmation.


Officially, the building had a rule against AirBnB’s. My first thought was how many AirBnB’s were being rented out at this location? AirBnB’s are against Miami/Miami Beach ordinances but the South Florida market remains AirBnB’s fifth largest market globally. So someone is finding AirBnB rentals.

Even if the HOA had prohibited AirBnB’s, this is very difficult to police. I read article after article discussing the unaccounted for people, how they were “visiting a friend,” how they were “vacationing,” even how they had come to Miami to get vaccinated.

“Staying with a friend” is what AirBnB hosts tell their guests to say to avoid these rules. Other than the usual complaints against AirBnB, it is significant here because the last thing absentee owners running irregular mini-hotel businesses want is added expense. Having to replace towels is bad enough, but a special assessment can kill profits. Owners can and will do anything to postpone such assessments; it gives them a chance to avoid those fees by selling the unit and buying somewhere else. It also means that that you will have a group of owners who will vote against any and all improvements. Even though AirBnB’s are prohibited now, it is not clear at all whether they were prohibited in 2018, the year that significant structural damage was uncovered.

The 2018 Inspection

In 2018, structural engineers inspected the Champlain Towers and wrote a report which contained a word that, like “hanging chad,” Florida has now given to the world. The word is of course, “spalling” which refers to chunks of concrete not just cracking, but falling off the building. They found a good deal of spalling, rusting rebar and recommended urgent repairs to the tune of 9 million dollars. The City of Surfside’s inspectors praised the HOA for starting the 40-year building recertification process three years early.

Except for three years nothing happened. Maybe because the Board voted against it, or the AirBnB owners voted against it: at this point we don’t know. At some point this year, however, the HOA proposed making structural repairs but added 6 million dollars’ worth of non-essential, aesthetic improvements–condo boards in Florida tend to do that. There were probably more arguments about those non-essential improvements than the rusting rebar. A special assessment was voted and was based on the size of individual units. The special assessment ranged from a low of $80,000 to a high of $300,000. We know that the funds had not been collected since one of the surviving unit owners said that he had canceled his loan application.

The 2018 Inspection: Secret?

The Becker Law Firm (formerly Becker & Poliakoff) has a large condominium practice in South Florida and represents many homeowners’ associations. The 2018 report was delivered not to individual unit holders, but was prepared for the HOA itself. The HOA is a separate legal entity apart from the homeowners. At least some of the homeowners had from time to time sued the HOA, though none had sued to force the HOA to implement the critically needed repairs. Why didn’t anyone in this litigation-happy building sue? There can only be one reason: they didn’t know.

Why do I think that the HOA’s lawyers told the HOA that they had no obligation to disclose the report to the individual owners? At some point, we may find out, but I think it is likely the Becker Law Firm has already given notice to its own malpractice carrier. I think it is likely that no unit owner sued the HOA because they didn’t know about the inspection.

The Three Year Wait

Why the three year wait? With unit holders, whether absentee AirBnB owners or not, voting against special assessments, maybe condo management realized that they would never get a 9 million dollar special assessment approved. But with the 40=year recertification just around the corner, it would be relatively easy to style the required repairs as part of the 40-year process and win approval that way. I admit that this is speculation on my part, but otherwise, why the wait?

Mortgage Liability

While some unit owners may have paid cash for their units, most took out mortgages. If they did not have mortgage insurance, the mortgage debt persists despite the destruction of the underlying property. This may send a few owners into bankruptcy court as well.

Political Pressure

There are high rises on both sides of Collins Avenue stretching from the county line all the way to South Beach. My condo was twenty blocks south at 6767 Collins. There will be enormous political pressure on the investigators to find that the cause of the collapse was peculiar to that particular piece of land and not general in nature. If general in nature, like rising water levels, the property values of those buildings on the east side of Collins Avenue have just dropped precipitously. Those who have renewable umbrella insurance policies will be happy, but my guess is that not everyone does. I know I didn’t.

The Future

How this will all play out is anyone’s guess. What was prime South Florida real estate all of a sudden became much less attractive. Lots of owners will be unable to pay new special assessments and will seek to sell their units, creating a glut on the market and a drop in property values. But it’s South Florida: there are always a few who believe that even when undercapitalized they can fix things “for now” and squeak by. The bankruptcy trustee will probably find a developer who is willing to wait a few years, figuring that when all the excitement quiets down a few strategic political campaign donations will make pulling a new construction permit a possibility. People will forget about these victims because there will be new catastrophes and new victims. Nothing in South Florida is permanent. Even apartment buildings collapse.