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HOW TO TERMINATE A CONDO?
By
Jan Bergemann
Published August 16, 2024
There are nice ways to terminate a
condo – and there are nasty ways. And both seem to work!
The NICE WAY: A developer
offers great prices to the unit-owners in badly maintained
buildings and allows owners to get out with money in their bank
accounts, often more than their units are actually worth.
But then there are some NASTY WAYS:
1.)
The developer is buying secretly more and more units, using
different buyers so nobody gets suspicious. Once the developer
and his straw buyers have a sufficient number of votes, the
developer takes over the board and levies huge special
assessments – special assessments most of the remaining owners
can ill afford. That will force even more owners to sell their
units. Then there are still some owners who remain steadfast in
not selling their units. Good for them if they have enough money
to pay the special assessments, otherwise the association
(meaning the developer) will foreclose on their units. But in
the end the winner is always: THE DEVELOPER.
2.)
The developer is openly showing interest in buying the complete
association property, offering and paying good prices for units
owners are willing to sell after realizing that they can no
longer afford to live in a building that requires huge
structural repairs. In cases like that there is always a wide
majority of owners willing to sell. But then there are a few
owners left, determined to keep their units and are willing to
file a lawsuit against the developer trying to terminate the
condo. And we have seen in one case that they may even win in
court. But in all reality it may be a Pyrrhic victory. Now the
developer has two options: Appealing in court – or getting
nasty. Since the building is in real bad shape, he can again use
huge special assessments in order to change the mind of the few
owners left. It’s just a matter of the amount of money the
remaining owners will have to come up with. In the end it’s just
a matter of: Who has more financial abilities? Normally the
developer and the investors behind him/her.
3.)
The developer can use FS 718.117 (Economic waste) to
succeed in terminating the condo. It sure is an option if all
other attempts fail – and it’s definitely a great option if you
see some of the engineering reports of a lot of old buildings
which are often in disrepair. It will be interesting to see how
a few owners unwilling to sell will fight this option.
I am convinced that
we will see all these options being used by developers
interested in buying old condo buildings in order to build
higher buildings with more fancy units.
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Jan Bergemann is president of Cyber Citizens For Justice,
Florida
's largest state-wide property owners' advocacy group.
CCFJ works on legislation to help owners living in
community
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associations. He moved to
Florida
in 1995 - hoping to retire. He moved into a HOA, where the
developer cheated the homeowners and used the association dues
for his own purposes. End of retirement!
CCFJ was born in the year 2000, when some owners met in
Tallahassee
- finding out that power is only in numbers. Bergemann was a
member of Governor Jeb Bush's HOA Task force in 2003/2004.
The organization has two websites to inform interested
Florida
homeowners and condo owners:
News Website: http://www.ccfj.net/.
Educational Website: http://www.ccfjfoundation.net/.
We think that only owners can really represent owners, since all
service providers surely have a different interest! We are
trying to create owner-friendly laws, but the best laws are
useless without enforcement. And enforcement is totally lacking
in
Florida
!
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