DEVELOPERS ARE ON THE PROWL

By Eric Glazer, Esq.

Published October 25, 2021

 

I got a call this week from The Miami Herald.  They asked if I had heard about the prominent developer who approached the owners of the other Champlain Towers buildings that are still standing, offering to buy out all of their units.  I had not, but Iím not surprised in the least about it.  In fact, itís going to be happening more and more.  Developers are going to be approaching lots of owners in condominiums that are distressed.

 

Why approach the owners in the remaining Champlain Towers condominiums?  Iím sure the developer is thinking that these owners may now have a hard time selling their condo units on the open market because there may not be many buyers interested in purchasing a unit in a condominium by that name.  The Champlain Towers will forever be remembered as the building that collapsed and where nearly a hundred innocent people died.  I think the developer is right.  It will be tough to sell your units in the remaining Champlain Towers condominiums.

 

The truth isÖÖif thatís the caseÖand it is next to impossible to now sell your condo unit in these buildings, the developer can look like a knight in shining armor, if the price they offer is fair and reasonable.  It may very well make sense for the owners to seriously consider the developerís offer.  At the remaining Champlain Towers buildings, the developerís offer is contingent upon 95% of the owners agreeing to sell to the developer.  If less than 95% of the owners agree to sell, the deal is off the table.  Thatís because if at least 5% of the owners vote against a plan of ďterminationĒ the developerís plan to ďterminateĒ the condominium, knock it down and build a more expensive one fails.  So, the developer needs to acquire at least 95% to ensure their plan succeeds.

 

We know that itís about to get more expensive to live in a condominium because it looks like it will become more difficult to waive reserves and buildings will be undergoing more frequent inspections.  Repairs will be needed more than ever before which means money will be needed like never before.  When unit owners donít have the money or donít want to spend the money on a building thatís already old, rest assured that developers will be there ready to make an offer to everyone so that the property can be bought, knocked down, rebuilt and sold.

 

Over the last few years the law has made it more difficult to terminate a condominium.  As a result of the tragedy at The Champlain Towers I certainly expect the pendulum to swing back the other way.  Terminations will become easier.  Developers will use their eyes and airs searching for the most vulnerable properties, meaning the ones that will require the greatest cost to repair.  The laws regarding termination continue to evolve, but if I am a developer I may want to be cautious about buying units in a condominium that requires 100% of the owners to agree to termination and that does not have Kaufman language or ďas amended from time to timeĒ language.  In these types of condominiums, one owner who refuses to sell may wind up screwing up the developerís grand plans.


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About HOA & Condo Blog

Eric Glazer

Eric Glazer graduated from the University of Miami School of Law in 1992 after receiving a B.A. from NYU. He has practiced community association law for three decades and is the owner of Glazer and Sachs, P.A. a five attorney law firm with offices in Fort Lauderdale and Orlando.

Eric is Board Certified by The Florida Bar in Condominium and Planned Development Law.

 

Since 2009, Eric has been the host of Condo Craze and HOAs, a weekly one hour radio show that airs at 11:00 a.m. each Sunday on 850 WFTL.

   

See: www.condocrazeandhoas.com.

   

Eric is the first attorney in the State of Florida that designed a course that certifies condominium and HOA residents as eligible to serve on a Board of Directors and has now certified more than 20,000 Floridians all across the state. He is certified as a Circuit Court Mediator by The Florida Supreme Court and has mediated dozens of disputes between associations and unit owners. Eric also devotes significant time to advancing legislation in the best interest of Florida community association members.



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