Judge Gives Nod to Surfside Unit Owners’ $83M Settlement

A judge has given preliminary approval to a settlement agreement that would allocate $83 million to individual owners of condominium units at the collapsed Champlain Towers South in Surfside, Florida. It’s the latest of several developments in the aftermath of the tragedy that killed 98 people last summer.

The settlement money would come from the condo association’s property and liability insurers and from the sale of the beachfront property, which will be placed into a common fund, Miami-Dade Circuit Judge Michael Hanzmann wrote in his order.

The agreement would apply only to condo owners who lost their units and belongings in the collapse and does not address all of the wrongful death lawsuits brought by families of victims who were killed. Objections to the agreement must be filed by March 23. A hearing will be held March 30.

Each unit owner will be paid a proportionate share of the common fund, based upon their ownership share of the condominium, the approval order explains.

“After hearing from the parties, the court may (or may not) reduce an owner’s recovery by any insurance payment received to compensate them for the value of their unit (not contents),” the judge wrote. “And while the agreement is silent on this point, the unit owners also may be required to pay — out of the aggregate $83 million ‘Common Fund’ — attorney’s fees and costs to compensate counsel for services performed solely on behalf of the economic loss subclass.”

Last week, the Miami-Dade County Commission passed an ordinance requiring that financial statements and structural safety reports of condominium and homeowner associations be made public. Inspection documents may prove to be important for insurers who are considering underwriting condo properties and will likely mean that some carriers will non-renew more policies or will decline to provide coverage, agents have said.

Miami-Dade Commissioner Rene Garcia, who sponsored the ordinance, had been working on the issue before the condo collapse after receiving numerous complaints from residents, according to spokesperson Iraida R. Mendez-Cartaya, according to the Associated Press.

But the collapse in Surfside brought the issue of condo transparency “into stark visibility,” said Miami-Dade Mayor Daniella Levine Cava, who endorsed the legislation.

The law requires associations to upload financial statements, engineering reports and maintenance documents related to long-term structural concerns about buildings to a publicly viewable county database by February 2023, the Miami Herald reported. Most of the documents were currently available to property owners, but were otherwise not available to the public.

Florida law currently requires condo sellers to turn over financial documents and reports on assessments to buyers once a sales contract is signed, if the buyer requests the paperwork.

“I think this is a step that the rest of the state will look to,” Cava said. “I think this is a very innovative, creative way to address this issue.”

A year before the Surfside collapse, the city of Hallandale Beach became the first in Florida to pass an ordinance requiring condo associations to file financial reports for the public to view. The city’s website, hallandalebeachfl.gov, has folders for each of the 100-plus associations to upload their documentation.

The state Legislature also has taken the Surfside tragedy into account. Last week, the Florida House unanimously passed a bill that would require statewide recertification of any condo building above three stories high.

Meanwhile, a class-action lawsuit filed against the developers of a high-rise property next door to the Champlain Towers South has added the property’s condo association, the architects and engineers, according to the Miami Herald. The construction of the building, known as 87 Park, damaged the foundation of the Champlain Towers, contributing to the collapse, the lawsuit charges.

The defendants in the suit have denied the allegations and have said they followed proper building standards, but DeSimone Consulting Engineers has already agreed to pay $8.6 million to settle, the Herald reported Tuesday.

On Tuesday, it was revealed that the engineers and the law firm for Champlain Towers had agreed to settle their part of the class-action for almost $47 million, the Herald reported.

The Becker law firm, which has represented condominium associations in South Florida for years and is known for helping condos oppose reform measures, was charged with failing to warn residents of the imminent collapse of the building. It will pay $31 million to settle. The settlement was announced last month but the dollar amount was not disclosed until now.

An engineering firm, Morabito Consultants, will pay $16 million. The firm was hired to examine the Champlain Towers for its 40-year inspection and had recommended major structural repairs. Those were just getting underway when the building collapsed June 24. The condo association and victims’ families argued that the engineers did not warn residents of the immediate danger.

All of the settlement money will be paid by the law firm’s and the engineering firms’ insurance companies, the newspaper noted.

Judge Hanzman must review the settlements before they can be finalized.

Photo: A memorial outside the collapsed Champlain Towers South condominium building. The 87 Park building is seen in the background. (AP Photo/Lynne Sladky)

Topics Legislation