Floridians forced to sell their homes at huge losses
A state law can force some Floridians out of their condo units for only a fraction of what they originally paid

Article and Video Courtesy of America Tonight

By David Martin & Sheila MacVicar   

Published February 10, 2015


ORLANDO – When Amanda Gonzalez bought her two-bedroom condominium near Orlando in 2006, she thought she was getting a foothold on the America dream.

Gonzalez never missed a payment for her mortgage, condo fees or taxes, even after the real estate crash in 2008 and 2009. When she was laid up after an accident, and money was tight, she still kept her books in order. So it came as a shock when the company that sold her the unit told her the complex was being converted into rental apartments ("terminated"), and that she had to accept what the company offered – far less than what she had paid.

Under a Florida law, companies that own more than 80 percent of condo units in one building can terminate a condo complex under certain conditions and turn it into apartments for rent. The companies have to pay the owners they're evicting the "current market value" for their units, which may not even cover their mortgage. Some owners, who have diligently paid their bills and fees, are left without a home and drowning in debt.

“I thought we lived in a country where your property couldn’t be seized for private gain,” Gonzalez said. “And this blows me away that this is possible in the United States. It blows me away.”

According to Seminole County records, Gonzalez purchased her unit at Serenity at Tuskawilla from Prestwick Partners, a boutique property company run by two Miami lawyers. After Florida’s real estate crash, she had no intention of selling her unit; she figured its value would eventually bounce back. But she never got that chance. In 2013, Prestwick Partners filed papers to terminate

The same lawyers that sold Amanda Gonzalez her condo for $181,450 forced her to sell it back for a quarter of that amount. “I thought we lived in a country where your property couldn’t be seized for private gain," said Amanda Gonzalez, former Florida condo owner.

the condominiums at Serenity at Tuskawilla.

Appraisers paid by the new owners assessed Gonzalez's unit to have a fair market value that was just a fraction of what she paid. She had no choice but to sell at that price; she says Prestwick Partners told her they technically already owned her unit.

"I paid them money up front and now they’re buying it back for pennies on the dollar," she said. "I’d love that deal. Sign me up."

Last week, Gonzalez said her lender allowed her to walk away from her mortgage – a “short sale” – but her credit is ruined, an embarrassment for someone who runs an accounting business.


“It’s humiliating from a professional standpoint. It’s frustrating from a personal standpoint," she said.


Shirley Lofgren is fighting her termination. But if she's forced out at the price Prestwick Partners is offering, she would lose a lifetime of savings.

"It feels like such a violation to go through this."


Shirley Lofgren, 85, paid $217,500 for her Serenity condo – almost all of it in cash – when she moved to Florida in 2007 with her husband, Robert, who's since been diagnosed with Alzheimer’s and now lives nearby. She says Prestwick Partners is offering her an assessed value of $46,500. If she took the offer, it would wipe out the equity she spent a lifetime to build, and she doesn’t have enough cash to buy something else.

“I thought when you owned something you owned it,” Lofgren said.

She's hired a lawyer and is fighting the condo termination. A few other condo owners have sued and settled for undisclosed amounts. But the men behind Prestwick Partners, Daniel Marzano and Michael Cosculluela, insist the firm's actions are 


Lansbrook Village residents say a consortium now owns 87 percent of the units in the complex, and they've been warned a termination is coming .

100 percent legal and were spelled out in the condominium declaration.


“If people are too lazy to read the fine print, that’s their problem,” Daniel Marzano said in a phone conversation with America Tonight.

When pressed on whether their actions were moral, Michael Cosculluela replied: "There's no question of morality in business."


Unintended consequence


Florida's 2007 condominium termination law was designed to help developers salvage aging or storm-ravaged properties that would cost more to repair than they were worth. Many condo association agreements require 100 percent of unit owners to agree on a major decision like selling the property or converting it to apartments, and in some of these cases, finding all the owners was simply impossible.
The law lowers the bar. It allows for a developer who owns 80 percent of the units to terminate a condominium complex, unless 10 percent or more of the residents object. If an investor owns more than 90 percent of the units, there’s nothing a condo owner can do to stop the takeover. 
In the depths of Florida’s real estate crash, blocks of unsold condos hit the market at cut-rate prices. But as Florida's rental market has gained strength, the state's condominium developments have become attractive targets for investors. And they're using the law to force owners to sell.


Some 271 condominium complexes have been terminated in Florida since the law passed, according to state records, affecting nearly 20,000 units.


In 2005, Joe Cunningham, a retired Philadelphia cop, and his wife Linda Cunningham, a retired school teacher, were hoping to split their retirement years between Florida and Cape May. So, they bought a $240,000 condominium in a Lansbrook Village, a new, manicured 774-unit complex near Tampa, paying $160,000 upfront.

The story of Lansbrook Village is typical of Florida's real estate collapse. In 2008, three years after building Lansbrook, the original developer faced a foreclosure on the property. Then, the bank that backed the project was declared insolvent, so the Federal Deposit Insurance Corporation oversaw the auctioning off of its assets for just pennies on the dollar. A huge block of units found its way into the hands of BR Carroll Lansbrook, formed by Blue Rock Investments in


If the termination goes through, Joe and Linda Cunningham will have to give up their retirement plans of snowbirding in Florida.

New York and the Carroll Organization in Atlanta. That consortium now owns more than 80 percent of the units in the complex. The Cunninghams and their neighborhoods have been told a termination is coming.

"I didn't fight in Vietnam so someone could take my property away from me," said Joe Cunningham, a decorated veteran. If the complex is terminated at the current market value of $80,000, they said they’d lose their entire investment. Like other owners we spoke to, the Cunninghams are current on their mortgage, property taxes and homeowner fees.

“We’d have nothing. We would get nothing back,” Linda Cunningham said.


Blue Rock Investments did not respond to calls and emails. Patrick Carroll, founder and CEO of the Carroll Organization, declined through a spokeswoman to appear on camera. Questions emailed to Carroll about BR Carroll’s intentions for Lansbrook Village went unanswered.

But in a news release last year, the Carroll Organization called Lansbrook "an excellent investment opportunity." The privately held company cited its attractive location, “value-add” potential and a price tag lower than building a new development. On its website, the firm continues to boast about its "buying spree" in Florida. 


‘Nobody helping us’


Not far from the Cunninghams, Stephanie Krasowski said she'd be plunged $100,000 in debt if she loses her legal battle to stop the termination at a complex called Madison Oaks. In her case, the owners are using the condominium association’s bylaws to convert the complex from condos to apartments.

A statement from Madison Oaks Partners LLC, which owns most of the units, said Madison Oaks is a “failed condominium” complex in danger of falling into “irreparable neglect.”

“This has never been a failed community. We are 100 percent occupied,” Krasowski countered. She's formed the organization Floridians Against Condo Takeover to rally condo owners facing terminations and to urge lawmakers to amend the law.


Stephanie Krasowski says she'll be forced to file bankruptcy if her complex is terminated.

“There are no agencies in the state of Florida that are regulating what these bulk buyers or investors are doing," Krasowski said. "They're literally coming in here, doing whatever they feel that they can do, and getting away with it. There's nobody helping us."

If the termination goes though, Krasowski said she'd have no choice but to file for bankruptcy

The state Department of Business and Professional Regulations records how many terminations take place, but a spokeswoman said the statute does not give the agency authority to regulate terminations.

State Rep. Chris Sprowls, a newly elected Republican in Krasowski’s district, is drafting a bill amending the state’s condo termination bill when Florida’s part-time legislature begins its 60-day session in March.

But it might be too late for the Cunninghams and thousands of other Florida condo owners living under the threat of a takeover. If theirs comes to pass, the Cunninghams say their $160,000 investment would simply evaporate, as would their dream of spending the winter months of their golden years in Florida.

“We’ve worked all our lives. We’ve been very responsible financially," said Joe Cunningham. "Yet someone could come in and take our home away from us.”