The decision whether to keep a condominium the way it is, or convert to apartments, usually comes down to a vote of the members of the condo association. But a loophole in Florida law is allowing real estate companies to take over a building and essentially force out remaining residents, often with arguable insufficient compensation.
The law states that a party that owns 80 percent of a condominium can decide on its own to terminate the condo association, if not more than 10 percent of the other owners object. From there, the minority owners can either receive a percentage share of the converted apartment building, or they are forced to sell their units at fair-market value.
Because many condo owners bought during the peak of the housing bubble, they may owe much more on their mortgage than they could get selling at current fair-market value. Without the option to stay in their home, many homeowners could find themselves struggling to find a new place to live.
Looking to take advantage of the pool of foreclosed and storm-damaged condos in Florida, investment companies have swooped in to take advantage of this law and convert complexes into rental properties.
A pair of bills in the Florida Legislature would raise the compensation to 110 percent of the purchase price or fair market value, whichever is higher. But one of the bills would waive condo owners’ right to compensation entirely if the 80 percent owner disclosed in its condo termination plan that it intended to sell the property after converting it to apartments, which is the plan for many of these investment companies.
Even when you own a condominium in Florida, you may never know when your rights may be turned upside-down. The help of a housing attorney may be needed to do what is possible to save your home.