DOES A DEVELOPER ALWAYS HAVE THE ABILITY TO TERMINATE A CONDO?

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Let me tell you what you should be looking for in your condominium documents after you stop reading this: the provisions in your declaration of condominium allowing termination of the condominium itself.

We know that condo assessments have doubled, tripled or even quadrupled in many instances due to increased insurance premiums, mandatory inspections, mandatory repairs and mandatory reserves.  It has simply become unaffordable for many owners.

Developers smell this.  Their nose is unique.  They can tell when the owners in a condo have had enough and would be willing to sell just to get out and avoid the monthly unaffordable assessments.  Developers are now on the prowl, offering owners, especially in older buildings that need work, the ability to sell their units to them, but at discount prices.  Their goal is to own enough units so that they can “terminate”

Termination of a condominium simply means that the building would not be a condominium any longer.  One owner, the developer, can come up with a plan to buy everyone out and everyone must go.

Here is where it gets interesting though…….Suppose your governing documents say that a 100% vote of the community is required in order to “terminate” the condominium?  Is it possible only one owner can prevent the termination by refusing to sell?  Certainly.

Now, let’s say the documents can be changed with a 75% vote of the owners.  Suppose the developer obtains enough units so that the developer can amend the declaration to reduce the 100% termination percentage to 75%?  Can the developer actually do that?  One court in Miami recently said no, as that would defeat the intent of the 100% requirement.

Under the termination statute, 718.117, a plan of termination must be approved by at least 80 percent of the total voting interests of the condominium. However, if 5 percent or more of the total voting interests of the condominium have rejected the plan of termination by negative vote or by providing written objections, the plan of termination may not proceed.  That’s why it’s important for at least 5 percent of the owner to hang on.

A condominium may also be terminated due to economic waste, meaning it doesn’t make financial sense to rebuild it.  Owners need to be care of that one.  Next week you will see why.

Eric Glazer
About the
Eric M. Glazer, a native of Brooklyn, New York, is a distinguished attorney specializing in community association law. He earned his B.A. in Political Science from New York University and his Juris Doctorate from the University of Miami School of Law. In 1994, he founded Glazer and Associates, P.A., and later formed Glazer & Sachs P.A. Eric has dedicated his career representing condominium and homeowner associations. He also hosts Condo Craze and HOAs Show on YouTube, where he educates and engages with a live audience on association-related matters. Additionally, he is a Florida Bar Board Certified attorney in Condominium and Planned Development Law and a certified mediator by the Florida Supreme Court.