By Rafael Aquino

Published February 3, 2021  


A VERY BIG SURPRISE is coming, and it may not be the kind that you like. Florida law allows developers to build condominiums and cooperatives on leased land. In other words, there are many condos/coops built on land that they don't own.


The major risks are that the lease may have requirements that the land and all improvements (building) revert to and becomes owned by the landowner. This is to mean that depending on what that 99-year lease says, you may not own your unit after all. Furthermore, the unit will be less marketable as the lease ends.


Sadly, not enough associations make this a priority to address a real existential crisis at worst, and at best, a disastrous financial obligation to the unit owners. A suggested plan of action is first and foremost make this a priority for the association:


1. Create a committee that will only focus on the review of the land lease and provide suggestions to the association board for consideration and resolution. The predominant solution other than negotiating a renewal of the lease is to purchase the land outright for a mutually agreed on price. This may be a point of contention for some associations since the land price may not be comparable to market valuations for normal vacant land. The association needs to keep in mind that it is buying the ability to eliminate a lease in perpetuity and outright eliminating the risk that unit owner homes will revert to the landowner. In other words, the association may pay more than it may think as the landowner has very little motivation to sell.


2. Engage your association attorney to conduct a very detailed review and provide legal counsel on the major points of concern i.e., expiration date, escalation clauses, valuation formulas, duties of both parties, options to purchase, and most importantly want happens the lease expires. Your association attorney should feel comfortable with commercial real estate purchase/sale contract negotiations and title/closing agent process.


3. Engage a qualified management professional that can conduct a comprehensive evaluation of the operating budget, current significant variances, liquidity which is your short-term ability to meet current obligations, and solvency or the long-term ability to meet long term obligations such as capital projects tied to special assessments (more than one year) and reserves. This evaluation should also include the impact of the purchase of the land.


4. If you do not have a website already, this is a point where you can leverage this management tool to increase communication about this very important issue, keep everyone informed on the progress, post-meeting documents, and ensure that everyone is on the essentially on the same page.


5. Whether there will be an increase in the association's regular assessments depends A GREAT DEAL on the management evaluation. There has to be a truly intimate understanding of the finances, operational priorities, and ability to find the right financing structure from a qualified banking institution.


Barring all these efforts, the association can hope that the Florida legislature will create a mechanism of some sort that will allow an orderly and fair process to deal with the leases' expiration and protection of homes.

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As the Co-Founder and CEO of Affinity Management Services, Rafael P. Aquino leads his team to redefine excellence. They serve community   associations   efficiently

and effectively with dedication and passion. Rafael’s energy and positive spirit is the foundation of Affinity Management Services’ company culture, which instills enthusiasm and excitement when providing expert advice to its board members and relieving the day-to-day burdens of running a community association.


Since 2007, Rafael has developed a work culture that values responsive and high-quality services. He has led his team by following a proactive vs reactive philosophy. The same approach Rafael instills in the day to day operations of each association. Today, Affinity Management Services maintains its success and benefits as a result of the foundation Rafael has built and continues to foster by providing educational seminars, continuing education classes for association managers and board members alike.

Rafael and his team help condominium and homeowners’ associations save money and improve their communities. His calm, personable, and service-oriented nature helps him to establish strong relationships with ease. Rafael is known as a sincere and honest leader who looks out for the best interests of his clients and communities, and he strongly advocates for their needs. His role requires coordination and communication, as such he takes logical and intelligent steps to approach challenges head-on.

As a graduate of Florida International University’s electrical engineering program and a licensed community association manager, Rafael’s education and skills equip him with unique insights to tackle complex problems through critical thinking. He understands how each component within a system works together in order to effectively arrive at solutions, techniques, and conclusions. Therefore, as he manages the multiple challenges of running a community association management company, he understands how each property is its own unique system and tailors’ specific services to assure that all their needs are met.

For more information about Rafael P. Aquino and Affinity Management Services please visit or call 1-800-977-6279

Doral Office: 8200 NW 41st ST

Suite 200

Doral, FL 33166

Broward Office: 150 S Pine Island RD Suite 300

Plantation, FL 33324

O: 800-977-6279 ● F: 305-325-4053

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