Florida should not allow
billion-dollar real estate companies to
bully condo owners into selling their homes,
especially at unfair prices. But that’s
exactly what’s happening around the state
and in the Tampa Bay area thanks to a faulty
law. Legislators have tried to mitigate the
problem, but if they really care about
property rights and fundamental fairness
they have to do more.
Lawmakers appeared
well-intended in 2007 when they passed legislation that
lowered the portion of condo owners needed to approve
repairs or terminate a condo association from 100 percent to
80 percent. The idea was to ensure that condo associations
could respond quickly to damage caused by hurricanes and
other catastrophes, or disband if the complex was beyond
repair. But there were unintended consequences — well-healed
real estate companies saw an easily exploited loophole. The
80 percent threshold made it easier to take control of condo
complexes, even ones never affected by storms, and then
force any stragglers to sell at low prices.
Condo owners, many of them seniors, complained about high
pressure tactics to get them to sell, according to a recent
Tampa Bay Times report. So many people protested that in
2015 the Legislature tweaked the law to require “bulk
buyers” to pay at least what the owner had paid, but only if
the owner had bought the unit from the original developer
and had a homestead exemption on the property. That doesn’t
go far enough. Every condo owner forced to move should be
offered at least what they paid. They aren’t looking to
leave. It’s a major disruption to their lives. Why should
they pad an investor’s bottom line by having to accept
unfair offers?
This isn’t about cleaning up dilapidated complexes. The
Lansbrook Village development in North Pinellas featured in
the Times report is tidy and surrounded by green space and
lakes. In many cases, the developers target well-maintained
complexes with low- to mid-range prices that they can
convert from condos to apartments. One expert told the Times
that bulk-buyers already own at least half the units in
about 30 condo complexes in the Tampa Bay area, making them
likely candidates for condo-to-apartment conversions. |
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The Hampton subdivision in the Lansbrook Village
neighborhood in Palm Harbor. A large real estate company wants to
turn the condo complex into rental apartments, which has upset
several residents.
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State law now requires
anyone looking to terminate a condo
association to explain why it would be good
public policy. When a hurricane demolishes a
complex, terminating a condo association
makes sense. Otherwise, the rubble could sit
there for years. But converting a perfectly
good condo complex to apartments does a lot
more to enrich developers than it does to
serve the public interest. The provision,
however, is too new to know whether it will
protect condo owners who don’t want to move.
If the public policy requirement fails to
rein in bulk buyers, lawmakers should change
the law again to ensure it is used only
after catastrophes, not any time investors
spot an opportunity to gobble up units at a
low-ball price and make a few bucks. No one
who owns a home and makes regular mortgage
payments should get booted out solely so a
real estate company can cash in.