As many of us have read, property values are on the rise in South Florida, particularly in areas such as Aventura and Sunny Isles Beach. Further, developers have run out of buildable land in prime locations. In the meantime, many owners in South Florida find themselves living in old buildings that require millions of dollars in repairs in order to remain habitable. The owners are faced with pouring huge amounts of money into buildings that have outlived their usefulness but that are located in valuable beach front and east side locations.
The solution? Just like most things, your Condominium may not be forever. Typically, if eighty percent of the owners vote to terminate the Condominium, and no more than ten percent of the owners object, it is possible to terminate the Condominium. Thereafter, the Condominium can be torn down and a new property can be built on the site of the old Condominium. This is referred to as a condo termination and it is a true win-win: the owners typically receive payment that is multiples of what they would receive for their condos individually and the developer is able to acquire a piece of land that would otherwise be unobtainable.
Board Members should keep in mind that these transactions are complicated and not for the feint of heart. It is important for the Board to control the process to the extent allowed by law in order to ensure that the Owners receive the best possible sales price. But if the Board and the Owners can come together with the right buyer, everyone can emerge a winner and wind up with a real pot of gold at the end of the rainbow.
Joshua Krut is an attorney and the Chairperson of the Community Association, Club and Resort Practice group at Weiss Serota Helfman & Bierman, P.L., which has offices located in Miami and Fort Lauderdale.