In the wake of the Great Recession, Florida found itself with a surplus of unwanted condominiums that had fallen into a state of general disrepair after their owners were foreclosed upon, as well as buildings that simply sat largely empty with unsold units.
Seeing an opportunity, developers and investors from across the nation soon converged on the Sunshine State to take advantage of a state law that enabled them to purchase these condos essentially in bulk and convert them to rental properties. Indeed, statistics show that since 2007, these bulk-ownership investors have secured ownership of over 11,000 units.
While this was originally thought to be a welcome development, it has gradually become something of a nightmare, as thousands of condo owners have actually been forced to sell their properties to these bulk-ownership investors after they assume control of condo boards of directors, change the bylaws and vote to essentially terminate the condo association.
Not only has this resulted in people essentially losing their homes, but also losing thousands of dollars, as the remuneration for the seized condos -- paid in compliance with state law -- is often far below the original sale price.
To illustrate how this works, consider the experience of an 85-year-old woman, who originally paid $217,000 for her condo in Winter Springs back in 2007.
In early 2015, a group of Miami-based bulk-ownership investors purchased the majority of units in her complex and shortly thereafter terminated her condo rights in order to convert to rental properties. She was ultimately paid less than a third of her $217,000 purchase price and is now renting the same place she called home for so many years.
In our next post, we'll take a closer look at the legislation recently signed by Governor Rick Scott that is designed to enhance the rights of condo owners who find themselves caught in the middle of a rental-conversion takeover.
If you would have questions or concerns regarding a condo defect or any construction law issue, consider speaking with an experienced legal professional to learn more about the law, your rights and your options.