You wouldn’t know it from the broken security gate and weather-worn buildings, but at one time, the Grande Oasis condominium in Carrollwood was “a garden of Eden,” said resident Etty Segal.

“Not anymore.”

Like Adam and Eve, she and about 70 other owners may soon be forced out by a Florida law that gives one company power to seize the entire property.

The condo always had a mix of live-in owners and renters. But over time, corporate investors bought up more and more units to lease as apartments. One real estate firm, West Shore, now owns more than 90% of the property’s 1,000 units. The company has complete control of the condo board and a clear path to terminate the community’s existence as a condominium to become the sole owner. “Everybody that hears about this says ‘they can’t do that to you, you’re the owner,’ ” Segal said. “But for some reason it’s allowed.” An onslaught of takeovers like the one at Grande Oasis could be on the horizon as new condo safety guidelines go into effect next year. Regulations passed by the Florida Legislature following 2021's deadly Surfside building collapse have created a mountain of new expenses for condo associations and left some cash-strapped owners desperate to sell.

Doreen Rosselli, 63, right, points out rotting wood to fellow condo owner Etty Segal, 77, at the Grande Oasis at Carrollwood complex in Tampa.

Investors are eager to buy and redevelop these struggling properties, many of which are on prime pieces of land in hot neighborhoods or coastal communities. This could provide a lifeline for thousands of owners who cannot afford to bring their aging buildings up to the new standard, said state Rep. Vicki Lopez, R-Miami.

But owners who want to stay are left with little recourse if they are outnumbered.

 

Segal said if she loses her home she won’t be able to find a new one in her budget. Not in Florida at least, where home prices have shot up more than 60% in the past five years, according to data from the real estate firm Redfin.

Her fate may hinge on an ongoing legal battle out of Miami, where a small group of owners at the Biscayne 21 condo claim that a developer unlawfully terminated their condo association.
 

A corporate buying frenzy

The Grande Oasis started as an apartment complex but was turned into a condo in the early 2000s.

Resident Doreen Rosselli paid $183,300 for a two-bedroom unit there in 2006. She fell in love with the tall, shady trees and the lush pond. It was her own slice of heaven just minutes from downtown Tampa.

Then the housing market crashed and foreclosures stacked up. The complex went into receivership. It didn’t take long for a Texas investor to take interest in the place, buying up scores of condos at a time. It then took over the condo board and changed the bylaws, lowering the threshold for termination.

In 2019, West Shore bought the Texas group’s 883 units for more than $121 million. It has acquired several more since.

That’s when things really started to fall apart, Rosselli said.

Property maintenance went downhill. Neighbors got fed up with the deteriorating quality of life and left. Others gave into pressure from the majority owner and took the payout. They couldn’t handle the stress of not knowing what might happen to their homes.

Rosselli has stayed and led the charge against termination, organizing a lawsuit against West Shore. She said she feels like she has no choice left but to fight.

State law would require West Shore to offer her a fair market price if she’s forced to sell. But she said she doesn’t make enough to afford anything else in the area, which has gotten considerably more expensive since she moved there.

“Why should I be financially burdened just for someone who’s rich to get richer?” she said.
 

How to terminate a condo

For decades, condos could only approve major repairs and terminations if 100% of owners were on board. Then came the devastating 2004 storm season with four back-to-back hurricanes, followed by a wave of foreclosures leading up to the great recession.

“There were a lot of failed terminations and people who needed to get out,” said Joe Hernandez, an attorney with the Miami law firm Bilzin Sumberg who specializes in condo terminations. “The Legislature tried to act by making it a little bit easier.”

The bar for termination is still high — in many cases just 5% of owners can block it from going through. Still, if one buyer amasses enough units, it can be hard to challenge them, said Jeffrey Margolis, a real estate attorney with Berger Singerman law firm in Fort Lauderdale.

“You have developers with deep pockets who can fight it and unit owners who are financially strapped,” he said.

Some older buildings still require unanimous approval for termination as part of their bylaws.

That was the case at the Biscayne 21 condo in Miami. Owners there are suing Two Roads, a developer that purchased a majority of units in the building and took over the condo board. They claim the company unlawfully changed the rules to win a vote in favor of termination.

In March, an appellate judge sided with the unit owners, overturning a lower court’s ruling. Two Roads has requested a rehearing and is still waiting on an answer from the court.

“Hopefully this is a lesson to other developers looking to follow the same playbook that they must follow the rules,” the plaintiffs’ attorney, Jeffrey Lam, said in a news release.

The case could cause some developers to more carefully consider which condos they go after for termination, but it won’t deter them altogether, said Edgard Defortuna, CEO of Fortune International Group. His company has successfully terminated several condos in Miami and is in the process of acquiring at least one other.

“They’re not making any more land,” he said. “The waterfront is built up. So the possibility for terminations is always present.”

What happens next?

The Biscayne 21 case has provided a sliver of hope for holdouts in other buildings, including the Grande Oasis.

The appellate court judge hearing their case in Hillsborough County recently sided with majority owner West Shore. But Rosselli said if the Biscayne 21 owners prevail, it may give the folks at Grande Oasis a better shot of appealing their case to the Florida Supreme Court.

It’s still unclear if and when Grande Oasis will be terminated and what will happen to the property afterward.

A spokesperson for West Shore declined to comment for this story.

Lopez said statutes dictating termination are too vague and the Legislature needs to clarify the rules to prevent constant legal battles.

“There has to be a way to let people out of their current contract without them being held hostage by a small handful of people,” she said.

If a property has been destroyed by a hurricane or is on the verge of financial ruin, then termination makes sense, said Rosselli.

But that wasn’t the case at the Grande Oasis.

Instead, she said a corporation saw a money-making opportunity and took advantage, at the expense of individual owners. Rosselli would like to see a law that allows termination only under certain circumstances.

Until that changes, she said she fears deep-pocketed investors will always have the upper hand.