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Article
Courtesy of The News-Press
By
Dick Hogan
Published
April 2, 2014
Guy Nir and his wife Cheryl are upside down on the mortgage for their downtown Fort Myers condo and worried they could be forced out — but not by the bank.
Under a 2007 law passed by the Florida Legislature, the biggest owner in the building — Lofton Island Holdings LLP — has the right to dissolve the condo association and buy the Nirs’ unit whether they like it or not.
The Nirs, who live in Sarasota and bought the condo as an investment in 2008, are suing Lofton, a Canadian investment company, to stop the dissolution of the condo association.
“The statute, we believe, is just unconstitutional,” said Tracey Starrett, the couple’s lawyer.
But Lofton, which owns all but a handful of the 240 units in Tower 2 of the Oasis condominium on Palm Beach Boulevard, is contesting the lawsuit and says it’s done nothing wrong.
The condo association has filed a plan to terminate itself and give Lofton the right to purchase the Nirs’ condo, along with a handful of other owners, for fair market value.
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PIC Tower II of the Oasis in downtown Fort Myers.
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“From Lofton’s perspective, we have behaved appropriately and will continue to behave appropriately,” the company’s attorney Scott Rost said.
The fair market value would mean the Loftons would take a big loss.
In 2008 the couple paid $431,800 for the unit, financed by a $345,520 mortgage.
But the condo’s assessed value is listed on the Lee County Property Appraiser’s website as only $133,600, so if the Nirs were forced to sell they wouldn’t be able to satisfy the mortgage, Starrett said.
The statute was never intended to be used in the case of a solvent luxury condominium such as Tower 2.
Legislators in 2007 were concerned about condominiums that had become non-viable as a result of the real estate collapse that had begun in 2006.
“In circumstances that may create economic waste, areas of disrepair, or obsolescence of a condominium property for its intended use and thereby lower property tax values, the Legislature further finds that it is the public policy of this state to provide by statute a method to preserve the value of the property interests of owners, the law’s preamble states.
Starrett said there are no judges’ decisions on whether the law is valid.
The law was rarely used even for its intended purpose even in Southwest Florida, where distressed condominiums abounded after the crash.
“I don’t think that we’ve ever had any terminations in Lee County,” said Mark Benson, a longtime community manager in Fort Myers.
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