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Article
Courtesy of GlobeSt.Com
By Jennifer
LeClaire
Published
May 11, 2015
The concurrent bills—SB 1172 and HB 643—would force
bulk buyers of condominium complexes to pay a premium to holdout owners
who don’t want to dissolve the association.
Pending legislation before Florida lawmakers could dissuade bulk condo
investors from betting on distressed assets. The concurrent bills—SB
1172 and HB 643—would force bulk buyers of condominium complexes to pay
a premium to holdout owners who don’t want to dissolve the association.
That would mark a stark change form the past few year, where the common
practice has seen investors invest in distressed projects in bulk and
gain the power to dissolve the association and flip the property into
rentals. GlobeSt.com caught up with Jason Kellogg, a partner at
Miami-based litigation firm Levine Kellogg Lehman Schneider + Grossman,
to get his take on the bills and what the proposed changes really mean
in part one of this exclusive interview.
GlobeSt.com: Can you provide a brief overview of the concurrent
bills that recently passed in the House and Senate this Florida
legislative session?
Kellogg: The Senate Bill 1172 and House Bill 643, both of which
were passed this session, provide some protections to condo owners who
may be forced to sell their units at a loss in the event their
condominium is terminated by bulk unit investors. Currently, a condo
termination results in any unit owner who is underwater on his or her
condo selling at a loss and moving out of the unit.
The new bills provide that the unit owner receive a full satisfaction of
his or her mortgage, provided the owner is current on that mortgage and
all association fees. If the owner originally purchased the unit
directly from the developer and maintains the unit as his or her
homestead, then the owner will receive his or her full purchase price
for the unit.
Also, all homestead owners receive a 1% relocation fee and the
opportunity to rent their unit for 12 months. The bills also state that
if a termination vote fails to pass, it cannot be revisited for 18
months. The bills now go to Governor Scott to be signed into law.
GlobeSt.com: Where do these proposed changes stem from?
Kellogg: From well-publicized instances of condo owners being
forced to sell their condos for a loss, to the financial benefit of bulk
buying investors. The Florida legislature has proposed similar bills in
prior years, with popular support.
But none have passed. With the economy on more solid ground, and with
the condo market less reliant on the positive financial aspects of bulk
buying, this could be the year that an amendment passes.
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