Recent court ruling threatens property rights of 2.5 million Florida condo owners

[The Colorado Kid]

Interesting developments in Florida condo value situations

Recent court ruling threatens property rights of 2.5 million Florida condo owners | Opinion BY FLORIDA REPUBLICAN STATE REP. VICKI LOPEZ MAY 03, 2024 11:38 AM

https://www.miamiherald.com/opinion/article288229615.html?tbref=hp

This is an opinion piece

From the article:

However, a new ruling in Florida’s Third District Court of Appeals last month diminished the property rights of condo owners and gave veto power to any one unit owner who held out from the opportunity to sell.

If the ruling in Miami-Dade last month on Biscayne 21 stands, Florida condo owners are left with fewer rights and even fewer options. Just one individual could stand in the way of the desires – and what may be in the best interest – of the vast majority of owners.

 

[VacationForever]

That is just wrong.

 

[dioxide45]

It seems like it is protecting the property rights of that one individual that doesn't want to sell what they own. I recall the situation from years ago where one condo owner in Orlando didn't want to sell their condo to Westgate for them to build additional buildings at Westgate Lakes.

 

[pedro47]

What happen to the rights of the majority ?
This is sad, IMHO

 

[x3 skier]

I don’t believe anything written or said by any individual politician unless there are others who have also stated a view on the same issue, be it similar or differing.

 

[vacationtime1]

Looks like the lawyer who drafted the condo documents for this condo association screwed up.

Most condo CC&R's (like the ones we have for our timeshares) have a dissolution clause, whereby a supermajority of owners (typically 75% or 80%) can vote to terminate the condominium agreement, sell the project as a unit, and divide the proceeds in proportion to the underlying ownership of the condo association. There are often limitations (such as the building cannot be repaired for a reasonable cost after a disaster), but a clause to this effect would have avoided this particular problem.

Contrary to the headline, the Florida Supreme Court actually upheld the rights of Florida condo owners -- the right not to have their unit sold out from under them absent a prior agreement (the CC&R's). Of course it also upheld owners' rights to be jerks.

 

[dioxide45]

Looks like the lawyer who drafted the condo documents for this condo association screwed up.

Most condo CC&R's (like the ones we have for our timeshares) have a dissolution clause, whereby a supermajority of owners (typically 75% or 80%) can vote to terminate the condominium agreement, sell the project as a unit, and divide the proceeds in proportion to the underlying ownership of the condo association. There are often limitations (such as the building cannot be repaired for a reasonable cost after a disaster), but a clause to this effect would have avoided this particular problem.

Contrary to the headline, the Florida Supreme Court actually upheld the rights of Florida condo owners -- the right not to have their unit sold out from under them absent a prior agreement (the CC&R's). Of course it also upheld owners' rights to be jerks.

It wasn't the Florida Supreme Court, just the Third District Court of Appeals. It could still go to the state supreme court. The state of Florida could fix this with legislation. I would agree in the case of the article, the building is uninhabitable in its current state and should probably be demolished. Why would someone want to hold out and not sell. Are they hoping for a bigger payday?

 

[montygz]

The Biscayne 21 condo declaration requires 100 percent approval to move forward with selling to a developer. The judge is merely siding with that original declaration.

Appeals court ruling upending an Edgewater condo termination could put buyouts statewide in limbo

An appeals court ruling this week upending a condo termination in Miami is causing shockwaves among developers, as it could put buyouts in legal limbo.

therealdeal.com

I speculate that in the era this condo was built, purchasers were concerned their building could one day be sold to some big developer who would convert it to luxury penthouses. This would result in homeowners being forced out. Thus the 100% rule to ensure no one would be left homeless and protect each condo owner's individual property rights.

Is this declaration prudent today with trainwreck condo properties? Policies and laws with 0% flexibility don't always result in the intended outcome. The road to hell is paved with good intentions and zero-tolerance policies.

Anyhow:

With a 100% rule in effect, will some condo owners try to "hold out" for more money in an effort to soak developers? Absolutely. It wouldn't shock me if right now there are investors eagerly looking to buy some units in these old condos to do just that.

Are some developers looking to swoop in and capitalize on distressed older condos, potentially infringing on some poor, senior citizen condo owners? Absolutely. Think of all the money they can make tearing down the old condo and building a gleaming glass tower to sell units to South American billionaires.

Developers will likely get some legislative remedy for this. Developers in Florida get pretty much whatever they want.

The headline on that editorial makes it sound like the judge wasn't protecting individual condo owners, which is exactly the opposite of what he did.

"Court ruling threatens property rights of billionaire developers" probably won't be as convincing an argument for the lawmaker.

 

[chapjim]

The Biscayne 21 condo declaration requires 100 percent approval to move forward with selling to a developer. The judge is merely siding with that original declaration.

Appeals court ruling upending an Edgewater condo termination could put buyouts statewide in limbo

An appeals court ruling this week upending a condo termination in Miami is causing shockwaves among developers, as it could put buyouts in legal limbo.

therealdeal.com

I speculate that in the era this condo was built, purchasers were concerned their building could one day be sold to some big developer who would convert it to luxury penthouses. This would result in homeowners being forced out. Thus the 100% rule to ensure no one would be left homeless and protect each condo owner's individual property rights.

Is this declaration prudent today with trainwreck condo properties? Policies and laws with 0% flexibility don't always result in the intended outcome. The road to hell is paved with good intentions and zero-tolerance policies.

Anyhow:

With a 100% rule in effect, will some condo owners try to "hold out" for more money in an effort to soak developers? Absolutely. It wouldn't shock me if right now there are investors eagerly looking to buy some units in these old condos to do just that.

Are some developers looking to swoop in and capitalize on distressed older condos, potentially infringing on some poor, senior citizen condo owners? Absolutely. Think of all the money they can make tearing down the old condo and building a gleaming glass tower to sell units to South American billionaires.

Developers will likely get some legislative remedy for this. Developers in Florida get pretty much whatever they want.

The headline on that editorial makes it sound like the judge wasn't protecting individual condo owners, which is exactly the opposite of what he did.

"Court ruling threatens property rights of billionaire developers" probably won't be as convincing an argument for the lawmaker.

I see a "taking" in the works although the "public use" requirement of the Fifth Amendment will be hard to show. But "public use" has been significantly watered down.

 

[DeniseM]

Is this about condos or timeshares?

 

[dioxide45]

Is this about condos or timeshares?

Perhaps about HOAs, which are how most timeshares are also setup. That said, I susepct timeshares are easier to have the legal structure collapsed than an old condo complex that didn't write anything into the CC&R regarding the situation.

That begs the question. Can't the condo owners modify their CC&R documents with a majority vote which would then allow the condo to be dismantled with another majority vote vs 100%?

 

[free2travel]

What happen to the rights of the majority ?

The "majority" doesn't have rights. Individuals have rights. The majority has voting power but if there isn't a vote defined in the process, that power is irrelevant.
What is sad is that most Americans seem to have been fooled into thinking individuals really don't have any right that the majority can't take away from them, by yelling, by being offended, or a dozen other ways.

 

[1Kflyerguy]

Perhaps about HOAs, which are how most timeshares are also setup. That said, I susepct timeshares are easier to have the legal structure collapsed than an old condo complex that didn't write anything into the CC&R regarding the situation.

That begs the question. Can't the condo owners modify their CC&R documents with a majority vote which would then allow the condo to be dismantled with another majority vote vs 100%?

I would think that's an option. I have served on the CC&R committee for our HOA here in California. Our documents were drafted by the developer back in 1964, so definitely a bit out of date. There is a process for changes defined in the documents, though it uses a "Total Voting Power" process which is based on a super majority of the quorum. That's difficult, and one of items we hope to change with the revision. Its possible this condo HOA requires 100% approval for CC&R changes as well.

I know that in CA one option is to appeal to the court and have portions of the CC&R modified match state law, and eliminate the super majority / 100% approval requirements. Not sure if that's an option everywhere or just state specific. Though at this point that would clearly be seen as and end-run around this ruling and maybe problematic as well.

 

[montygz]

Perhaps about HOAs, which are how most timeshares are also setup. That said, I susepct timeshares are easier to have the legal structure collapsed than an old condo complex that didn't write anything into the CC&R regarding the situation.

That begs the question. Can't the condo owners modify their CC&R documents with a majority vote which would then allow the condo to be dismantled with another majority vote vs 100%?

I think this is what the judge ruled on.

To modify the rule to reduce the 100% requirement you would need 100% of the owners to be in favor of that modification.

They attempted to change the rule from 100% to 80% and were sued:

"In its ruling, the higher court determined that the original declaration gave every unit owner an effective veto over any termination, which would be lost if the amendments passed by the developer-controlled association were enforced."

 

[Ski-Dad]

Sounds like the judge made the correct decision. He read the condo corp's' constituting documents and held to their terms.

 

[Ralph Sir Edward]

I see a "taking" in the works although the "public use" requirement of the Fifth Amendment will be hard to show. But "public use" has been significantly watered down.

Doable under the Kelo ruling (2005).

 

[chapjim]

Doable under the Kelo ruling (2005).

That's it! Kelo v. New London. "Public use" morphed into "public purpose." Bad law, IMO. Misuse of eminent domain.

 

[dioxide45]

That's it! Kelo v. New London. "Public use" morphed into "public purpose." Bad law, IMO. Misuse of eminent domain.

It wasn't bad law, but rather a bad ruling. The land that was at the center of that case and was taken still sits vacant today. Nearly 20 years later.

 

[chapjim]

It wasn't bad law, but rather a bad ruling. The land that was at the center of that case and was taken still sits vacant today. Nearly 20 years later.

So, New London condemned the parcel for the benefit of the developer but the developer backed out (for whatever reason)?

 

[dioxide45]

So, New London condemned the parcel for the benefit of the developer but the developer backed out (for whatever reason)?

Apparently so, I believe it had to do with financing. Could also related to the 2008 crash.

 

[free2travel]

I see a "taking" in the works

It is not often the government is honest about what it is doing, but this would definitely be a "taking". So, let's see, not only aren't you safe in your home from government intervention, but your home itself isn't safe from government taking, just because.

At first I was a tiny bit surprised a journalist would write that headline that presents the situation completely backwards. Then I realized that it was written by a politician. Bullseye. The Big Lie in full effect, whenever a politician starts propagandizing.