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FLORIDA LEGISLATURE CORRECTS FLAWED TERMINATION PROCESS
By
Eric Glazer, Esq.
Published July 6, 2015
When the foreclosure crisis was at its peak,
developers were complaining that they were in effect stuck with
numerous condominium projects that simply weren’t selling. They
wanted the ability to at least try and save the project by
converting it into a rental community instead of being forced to
maintain it as a condominium. The problem was what to do about
those pesky people who actually did buy a unit in the
condominium and were now demanding that the condominium remain
as a condominium and the developer fulfill all of the
developer’s obligations.
I know this is hard to believe, but The Florida
Legislature helped out the developers in a big way. Despite the
fact that the law always required a condominium to be terminated
with a 100% vote of the owners, The Florida Legislature passed a
new law that now allowed for termination with an 80% vote.
Since the developer was normally stuck with at least 80% of the
units, termination was now easy. In effect, the statute allowed
the developer to now repurchase the units they sold to the
initial few and kick the owners to the curb. So, you would
think they get all their money back right? No. Under the new
termination provisions, the developer was only required to
repurchase the units for as little as what the county now
appraised them for. So, these people paid full price, paid
their mortgage each month, paid their assessments and were
getting kicked out anyway and forced to sell at tremendous
discounts.
It gets worse.
People like Jan Bergemann warned that this new law
would allow any other investors to gobble up units in even
successful condominiums, and once they own 80% of the units,
terminate them as well. While the statute was certainly meant
to get developers out of a condo project doomed for failure, the
new law could also be used by investors seeking to turn a
successful condo into a more profitable rental community. The
Florida Legislature didn’t heed these words. Until now.
After much publicity in the media, effective July 1st
the “termination” law has finally changed. A developer can
still terminate with an 80% vote, but not if ten percent of the
owners vote in opposition to the developer’s termination plan.
In addition, developers must pay the owners fair market value
for their unit as determined by an independent appraisal and a
relocation fee. The termination plan must also provide that the
first mortgage is paid in full for all units being purchased
under the termination plan.
It only took a couple of years to stop the damage to
Florida condominium owners. Developers literally get relief
overnight however time and time and time again.
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About
HOA & Condo Blog
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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
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decades and is the owner of Glazer
and Associates, 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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