DO YOU OWN YOUR CONDO OR CO-OP OR DO YOU LEASE IT?  ARE YOU SURE?

By Eric Glazer, Esq.

Published February 1, 2021

 

In about 25 years a crisis is coming to the condo and co-op world  that will be shocking to say the least.  Here is the problem.  Many of you think that by purchasing your condo or co-op, you can live there forever, as long as the mortgage, taxes and assessments are paid.  You may be wrong.  Very wrong.

 

Florida condo and co-op law basically say:  Leaseholds.ó

(1) A condominium or co-op may be created on lands held under lease or may include recreational facilities or other common elements or commonly used facilities on a leasehold if, on the date the first unit is conveyed by the developer to a bona fide purchaser, the lease has an unexpired term of at least 50 years. 

 

Thatís right your condo could be built on land that you donít own.  Land that you are leasing and someone else owns and who is simply leasing the underlying land to the condo association for 99 years.  After the 99 years are over, the lease may require that all property built on the land (meaning all of the condo units) revert back to and becomes owned by the owner of the land.  In other words, after 99 years, you lose your home.

 

Many of these 99 year leases began in the 1960s.  So, in about 40 years, lots of buildings will be faced with this fiasco if they donít do something about it before then.  As the date gets closer to the expiration of the 99 year lease term, the value of the unit keeps going down.  How can you sell a unit to someone if in 5 years it reverts back to the underlying land owner?  That unit is valueless.

 

Itís amazing how many people have no idea that this is going to happen.  How many people thought that once they paid off their mortgage, they were safe and secure.  They were wrong.  One day, the underlying land owner will be able to make you purchase the unit all over again if you want to stay.  Or, simply kick everyone out and build something new or sell to a new developer.

 

The law should never have allowed condos or co-ops to be built on leased land.  But, this is Florida Ė the land where developers call the shots.

 

If you live in a community with such a land lease, you want to see if you can buy it out and obtain a deed to the land.  That will avoid the potential disaster that awaits.  The Florida Legislature better start thinking about this coming crisis and not wait for it to creep up on everyone.


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About HOA & Condo Blog

Eric Glazer Eric Glazer graduated from the University of Miami School of Law in 1992 after receiving a B.A. from NYU. He has practiced community association law for more than 2

decades and is the owner of Glazer and Sachs, P.A. a seven attorney law firm with offices in Fort Lauderdale and Orlando and satellite offices in Naples, Fort Myers and Tampa.

 

Since 2009, Eric has been the host of Condo Craze and HOAs, a weekly one hour radio show that airs at noon each Sunday on 850 WFTL.

   

See: www.condocrazeandhoas.com.

   

He is the first attorney in the State of Florida that designed a course that certifies condominium residents as eligible to serve on a condominium Board of Directors and has now certified more than 10,000 Floridians all across the state. He is certified as a Circuit Court Mediator by The Florida Supreme Court and has mediated dozens of disputes between associations and unit owners. Eric also devotes significant time to advancing legislation in the best interest of Florida community association members.


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