A new law that can impact the private property rights of every condominium owner in Florida took effect on July 1, 2007. The “condo termination law” could make it easier for developers to purchase existing, older condo buildings that currently sit on land that is very valuable so that they can redevelop it for a sizeable profit.
The condo termination law requires only 80% of unit owners to consent to the takeover. Before the new law, all owners in a condo building had to consent before the sale could occur (allowing for a few resistant to selling out to prevent a sale). Under the new law, the takeover plan can only be stopped if a minimum of 10% of the unit owners of the complex object in writing within 90 days after the date the plan is recorded (the “effective date”). However, according to Senate Bill 314, they have “the burden of pleading and proving that the apportionment of the proceeds from the sale among the unit owners was not fair and reasonable.”
The condo communities most ripe for redevelopment and, therefore, “at risk” of being takeover targets as a result of the new condo termination law are the older condo buildings that are oceanfront or on the Intracoastal. Perhaps the easiest targets will be the smaller complexes where a larger, luxury building can take its place. Only time will tell whether the condo termination law will cause the type of controversy that eminent domain issues did in recent years.