TALLAHASSEE, Fla. – March 25, 2015 – Florida lawmakers may sew up a legal loophole that has permitted property investors to force some condominium owners to sell their units for less than they paid for them.
Bills making their way through the state's House and Senate seek to force bulk buyers of condo communities to pay more for any holdout units when they're working on a deal to convert the complex into rental apartments.
Current Florida law mandates that a property's condo status can be terminated under certain conditions. If those conditions exist, a bulk buyer can force owners to sell whether they want to or not based on current market prices.
Over the past eight years, the state has said buyers must pay the fair-market value of any holdout condo, but thanks to the housing meltdown, current fair-market value is often less than the amount of money owners owe on their mortgages.
Earlier attempts to revise this 2007 law have not been successful, but media coverage of impacted sellers has provided momentum this year. Passage isn't a sure thing, but its chances have improved. Both measures advanced this week, with the House bill obtaining approval from its second subcommittee and the Senate bill gaining approval from its first committee.
However, no bill has been scheduled for a floor vote yet. To become law, the full House and Senate must pass the same bill; it then goes to Gov. Rick Scott who must sign it.
Passage would mark a win for homeowners. As currently written, the bill would require bulk buyers to pay holdout condo owners the greater of 110 percent of its original purchase price or 110 percent of their unit's market value.
Critics say the changes would be an unnecessary roadblock to investors' efforts to revive run-down properties.
Source: Wall Street Journal (03/25/15) P. C6; Huidson, Kris; Campo-Flores, Arian