Surfside Condominium Tragedy Results in Stricter Fannie Mae and Freddie Mac Requirements

The Champlain Towers South in Florida partially collapsed on June 24, 2021, resulting in deaths and various casualties. Initial investigations revealed that design flaws, substandard construction, and inadequate regular maintenance were likely to blame. Miami Herald’s consultation with engineers and contractors confirmed this by pointing out design flaws and structural weaknesses as the main reasons for the tragedy.

It was revealed that the parts that survived were supported by columns measuring 24×24 inches, but the rest of the structures were smaller. The foundation used for critical areas was not built according to the building codes established by the American Concrete Institute at the time.

Two days after the incident, Surfside officials released Engineer Frank Morabito’s 2018 report from the tower’s initial board review. The investigation indicated that the property’s underground parking and pool deck had already sustained severe structural damage. The document also showed an evaluation of the damage and its repair cost estimate. However, the owners continued to delay the necessary structural repairs and only partially performed surface repairs that concealed deterioration indicators with concrete, pavers, tiles, and other materials.

The disaster impacts companies that manage, finance, and regulate condominiums. It alerted stakeholders and industries about the dangers associated with aging infrastructures and properties with critical deficiencies.

Mortgage industry giants became wary of loans secured by assets with significant safety concerns. So Federal National Mortgage Association and Federal Home Loan Mortgage, also known as Fannie Mae and Freddie Mac, took action to maintain confidence in the system. They established

new mortgage requirements for cooperatives and condominiums. These rules intend to improve the quality of mortgaged homes and avoid the consequences such as property damage to the financial sector.

Working with Lockatong Engineering assists cooperatives and community associations in fulfilling the new Fannie Mae and Freddie Mac requirements. The firm can conduct a commercial building inspection NJ to identify whether the property has significant structural deficiencies. It can help them perform their due diligence by obtaining all necessary information about the building’s structural condition. Lockatong EngineeringĀ also offers a reserve study conducted by a professional commercial building inspector NJ.

To learn more information about this, here is an infographic from Lockatong Engineering

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