Special Assessment Risks: A Cautionary Perspective on Murano at Portofino and Murano Grande

By Glenn Tyndall, CPA | September 13, 2023

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In the dynamic landscape of premium real estate, it’s essential to navigate the realm of upscale condominium associations with a keen understanding of the potential financial risks involved. Two notable properties, Murano at Portofino and Murano Grande, have undertaken transformative initiatives that spotlight a risk commonly associated with such endeavors: the prospect of special assessments. These upscale communities, crafted by the collaborative efforts of the Related Group and Thomas Kramer’s Portofino Group in the early 2000s, have unveiled proactive projects that serve as reminders of the financial prudence necessary when considering luxury living.

At Murano at Portofino, a multi-phase project has been set into motion, capturing the attention of unit owners and observers alike. Spearheaded by unit owner and broker Andres Asion, this initiative has galvanized the community to rally resources for necessary rejuvenation. The initial phase comes with a hefty price tag of nearly $30 million, addressing fundamental repair work spanning stucco, balconies, waterproofing, and water intrusion – common issues faced by coastal properties. Alongside these essential repairs, the project encompasses non-essential upgrades such as the renovation of the beach club and luggage cart replacements. However, the second phase, targeting pool and pool deck work, is still uncertain in terms of funding, which has become a source of concern among the property’s stakeholders.

Understanding the financial implications of such endeavors is paramount. The initial special assessment, totaling around $30 million, translates to an average of $160,000 per unit owner. This allocation is structured based on unit size and ownership count, requiring meticulous financial planning and a strategic approach. It’s crucial to recognize that the absence of building-provided financing necessitates individual unit owners to devise funding solutions independently.

Jose “Joe” Rodriguez, a respected real estate attorney and partner at Rennert Vogel Mandler & Rodriguez, highlights that financial institutions can play a role in alleviating this burden. Loans or lines of credit can be extended to condominium associations to support such projects. However, the decision-making responsibility rests with the condo board, which must engage consultants to determine priorities and navigate the complexities of orchestrating multiple initiatives simultaneously.

As potential buyers or investors consider the allure of Murano at Portofino and Murano Grande, they must also heed the inherent financial risks linked to special assessments. Just as homeowners face

unforeseen incidents like roof leaks or pipe bursts, condominium communities are susceptible to significant financial commitments arising from rejuvenation projects. While the dollar amounts may differ, the concept of unforeseen costs remains consistent. A proactive approach to understanding these potential risks and exercising financial prudence is imperative. The endeavors undertaken by these two properties serve as a reminder that the allure of luxury living must be weighed against the financial landscape, where special assessments are a persistent presence – a risk that can’t be entirely eliminated.

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