Extension of distressed condo bill advances

Article Courtesy of The Herald-Tribune

By Lloyd Dunkelberger

Published April 21, 2015

  

A program that encourages the purchase of multiple units in distressed condominiums will get an extension through 2018 under a bill approved Monday by a House committee.

The bill (HB 791) extends a 2010 law that was created to help revive condominium projects that collapsed following the Great Recession. The provisions are aimed at encouraging bulk buyers – defined as buyers who acquire seven or more units in a complex – to purchase units in distressed condominium projects.

But the extension also means that unit owners in the condominiums where bulk buyers are present could remain vulnerable to being forced to sell their units – sometimes for less than what they paid for them.

Also at play is a 2007 change in the state condominium law that allows the forced the sale of a unit if the ownership of 80 percent of the condominium units approve and 10 percent or less oppose it.

Lawmakers say that law has come into play in some distressed condominium projects where only 5 or 10 percent of the units were sold. Bulk buyers can acquire the remainder of the units and force a sale.

Rep. George Moraitis, R-Fort Lauderdale said his bill – which was approved by the House Finance and Taxation Committee in an 11-4 vote Monday – does not address the issue of the forced sales.

Instead his bill would extend the bulk buyer program through July 2018. Moraitis said the other options were to let the bulk buyer program, which he says has helped economically revive some communities that had large numbers of distressed condominiums, become a permanent change in the law or let it expire in July 2016 – as the law now reads.

“It is really designed for a recession but there are still some projects out there that could use some saving,” Moraitis said. “I just hate to see a tool taken away that could sort of encourage and revitalize a healthy project.”

Moraitis said the issue of providing more protection for condominium owners who could face forced sales in complexes with bulk buyers is being advanced in separate legislation (HB 643) sponsored by Rep. Chris Sprowls, R-Palm Harbor, which he supports.

Among other provisions, Sprowls’ bill would require condominium owners who are forced to sell would be paid a “fair market value” for their units.

Rep. Jose Rodriguez, D-Miami, who opposed the bill, said he understood the original need for the law “but I think it was never intended to be permanent.” Rodriguez said he would have preferred that lawmakers let the program expire as planned in July 2016, giving lawmakers next year if they need to make other changes in the law.

Rep. Lori Berman, D-Lantana, also opposed the bill, saying she had a condominium project in her South Florida district where unit owners were forced to sell their homes “for pennies on the dollar.”

Berman questioned how many distressed condominium projects remain in Florida, although no one was able to give her an immediate answer.


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LEGISLATIVE SESSION 2015