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DEVELOPERS ARE ON THE PROWL
By
Eric Glazer, Esq.
Published November 7, 2022
I’m already hearing stories of developers making low ball offers
to owners in high rise condominium buildings, offering to buy
units at bargain prices. Here’s why….. Developers knows that in
building of 25 years or more on the coast or 30 years or more
inland, owners are facing massive upcoming expenses.
These include but are not limited to:
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Mandatory fire sprinklers or an engineered life safety
system;
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A mandatory Phase One Inspection;
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A likely Phase Two Inspection which will subsequently result
in major repairs being required to the condominium property;
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A Structural Integrity Reserve Study and the full funding of
reserves.
It’s going to get
mighty expensive to remain living in some condominiums and
developers know that many owners simply won’t be able to afford
it. Their strategy is to offer you some money for your unit
instead of you having to come out of your pocket tens of
thousands of dollars or more.
Developers may rely
on simply making an agreement to buy everyone’s unit at the same
time and if even one owner decides not to sell, the deal is off.
Developers may also
have a strategy where they buy enough units to “terminate” the
condominium form of ownership. Under the current statute the
developer may wish to accumulate only 80% of all units. If so,
the developer can then file a plan of “termination.”
the plan must be approved by at least 80 percent of the total
voting interests of the condominium. However, if 5 percent or
more of the total voting interests of the condominium have
rejected the plan of termination by negative vote or by
providing written objections, the plan of termination may not
proceed.
If you read the foregoing statute, clearly developers would want
to purchase just in excess of 95% of all units so that nobody
can stop the plan of termination. However, some of you may have
language in your governing documents that would require a vote
of 100% of the owners in order to terminate the condominium.
The question of whether the magic number is 80%, 95% 100% or
some other number depends upon whether you have “Kaufman”
language or “as amended from time to time” language in your
governing documents. Believe me, it gets complicated.
The bottom line is that many of you will soon be approached by
developers looking for a steal. When this happens, rather than
have infighting among those that live and/or own in the
condominium, I urge you to seek the advice of counsel on this
very complicated topic.
No doubt
older buildings will be toppled by developers who will put new
ones in their place. It may be very unlikely that even though
you lived there for decades, you won’t be able to afford the
prices in the new condominium. Ladies and gentlemen,
gentrification is coming to a neighborhood near you.
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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 three decades and is the owner of
Glazer and Sachs, P.A. a five attorney law firm with
offices in Fort Lauderdale and Orlando.
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Eric is Board Certified by The Florida Bar in
Condominium and Planned Development Law.
Since 2009, Eric has been the host of Condo Craze
and HOAs, a weekly one hour radio show that airs at 11:00 a.m.
each Sunday on 850 WFTL.
See:
www.condocrazeandhoas.com.
Eric is the first attorney in the State of
Florida that designed a course that certifies condominium and
HOA residents as eligible to serve on a Board of Directors and
has now certified more than 20,000 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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