|
DOES A DEVELOPER ALWAYS HAVE THE ABILITY TO TERMINATE A CONDO?
By
Eric Glazer, Esq.
Published August 5, 2024
Let me
tell you what you should be looking for in your condominium
documents after you stop reading this: the provisions in your
declaration of condominium allowing termination of the
condominium itself.
We know
that condo assessments have doubled, tripled or even quadrupled
in many instances due to increased insurance premiums, mandatory
inspections, mandatory repairs and mandatory reserves. It has
simply become unaffordable for many owners.
Developers smell this. Their nose is unique. They can tell
when the owners in a condo have had enough and would be willing
to sell just to get out and avoid the monthly unaffordable
assessments. Developers are now on the prowl, offering owners,
especially in older buildings that need work, the ability to
sell their units to them, but at discount prices. Their goal is
to own enough units so that they can “terminate”.
Termination of a condominium simply means that the building
would not be a condominium any longer. One owner, the
developer, can come up with a plan to buy everyone out and
everyone must go.
Here is
where it gets interesting though…….Suppose your governing
documents say that a 100% vote of the community is required in
order to “terminate” the condominium? Is it possible only one
owner can prevent the termination by refusing to sell?
Certainly.
Now,
let’s say the documents can be changed with a 75% vote of the
owners. Suppose the developer obtains enough units so that the
developer can amend the declaration to reduce the 100%
termination percentage to 75%? Can the developer actually do
that? One court in Miami recently said no, as that would defeat
the intent of the 100% requirement.
Under the
termination statute, 718.117,
a plan of termination 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. That’s why it’s important for at least 5 percent of
the owner to hang on.
A condominium may also be terminated due to economic waste,
meaning it doesn’t make financial sense to rebuild it. Owners
need to be care of that one. Next week you will see why.
|
|
About
HOA & Condo Blog
 |
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.
|
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 airing at 11 a.m. each Sunday on 850 WFTL. Recently,
he moved the show to YouTube, transforming it into a more
dynamic and interactive experience. This move not only allows
viewers to engage in live chats with Eric and other participants
but also enables a broader audience to access free advice,
making valuable insights more widely available.
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.
|
