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3 Reasons You Need A Community Association Monthly Newsletter

Keep Residents Informed With A Community Association Monthly Newsletter

As a community association, it is essential that you keep your residents informed of everything going on in the community from events to maintenance, and whether you just have a few tenants or you have hundreds, the most simple way to do this is through a community association monthly newsletter. Whether you create a print newsletter that is put under people’s doors or a digital newsletter which has become increasingly popular over the past couple years, it is up to you to make sure that your residents have all the information they need to happily reside in your community.

3 Reasons You Need A Community Association Monthly Newsletter PeytonBolin

We’ve put together a list of 3 reasons you should have a community association monthly newsletter:

  1. Share Important Updates: If the pool is going to be closed over the weekend or if there is going to be maintenance done on the elevator, residents need to know ahead of time. Use your monthly newsletter as a way to share everything going on in the community to ensure that residents are kept in the loop and that you won’t have to deal with tenants who are unhappy because they planned a BBQ on a day that the grills were being replaced.
  2. Show the Voice Behind the Association: You want your tenants to think of you as more than just the “association” that makes the rules. Show them the person behind the association, and interact on a more personal level. Sign monthly newsletters with a name and invite readers to contact you if they have any more questions. Residents are more likely to be good tenants if they feel like you’re on their side, not against it.
  3. Build a Sense of Community: Use your monthly newsletter to invite residents to community events, share photos and stories from past events, and generally just build a sense of community. Some residents would probably jump at the chance to be featured in a newsletter, so that take to your advantage and give tenants some insight into the lives of their neighbors.

Having a monthly newsletter is important for every business, but it is especially important for community associations. It’s up to you to make sure that your residents are happy and informed, and a community association monthly newsletter is one of the easiest ways to do this. It keeps residents in the loop and helps reassure them that the association is there to make their community experience better and safer, which makes your job easier and keeps your pockets full.

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Can a Grandfather Clause Help You?

Why Grandfather Clauses Can be Useful in Community Associations

Environments change as time goes on and rules and regulations must change with them as a result. While rule changes may be necessary, they aren’t always easy to implement. Community associations and property managers must devise the best practices for introducing new rules and they must also deal with residents that aren’t happy with the new changes.

When it comes to rule changes in community associations, grandfathering can be useful in keeping residents happy and making sure that the rules reflect the best interests of the association. You’ve probably heard of the phrase “grandfather clause” but unless you’ve been directly affected by it, you may not know what it really means.

What is a Grandfather Clause?

Grandfathering or a “grandfather clause ( http://en NULL.wikipedia is a provision in which an old rule continues to apply to some existing situations while a new rule will apply to all future cases.” Anyone who is exempt from the new regulation is said to have “grandfather rights,” though the exemption is usually limited.

When is it Useful?

Grandfather clauses can be useful in a variety of situations and it really depends on the Can a Grandfather Clause Help You? PeytonBolinindividual community association. Lets say someone with a dog buys a condo in a building that allows pets, but then 2 years later the association decides that the building is going to be a no-pet community. The community may expect residents to be in compliance with the new rules, but it is unrealistic to think that condo owners with pets are going to move or give away their furry friend without a fight. Instead, the condo association can give grandfather rights to residents with pets. New residents would not be allowed to bring pets, and while current residents with pets wouldn’t be able to get any new ones, they could stay with their current pet as long as they were registered with the building.

Making changes in a community association is sometimes necessary to ensure the success and survival of the community, but changes are not always easy to implement. It’s important for community associations and property managers to understand what tools they have, like the ability to use grandfather clauses, so that they can ensure the happiness and safety of their residents, while still respecting the wishes of the board and ensuring the prosperity of the community.

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5 Tips for Getting Newly Elected Board Members Ready to Serve

Get Your Newly Elected Board Member up to Speed

As exciting as getting new board members is with all the opportunities it presents, it can be difficult to get them up to speed with everything that is happening. Just as with other jobs, you can’t expect to put someone in a brand new position and for them to just know exactly what to do and what not to do without any prior training. Just as each organization is different, each community association is different and it takes time to get new board members informed of everything they need to know to get the job done properly.
5 Tips for Getting Newly Elected Board Members Ready to Serve peytonbolin

Here is a list of 5 tips for getting newly elected board members ready to serve:

  1. Schedule an orientation meeting: Once a new board member has been elected, the first thing to do is schedule an orientation meeting. What you go over will vary depending on the community association, but the point is basically to get the new board member up to speed. Figure out who needs to be present for what conversations and map out what you will go over.
  2. Introduce new board members to others: This one may seem obvious but it’s important to give the new board member a chance to meet the other board members. This can be done during the orientation meeting or you can schedule some sort of welcoming event. A newly elected board member will perform better in a situation where he or she is comfortable with the people they are working with and feels as though they are part of a team effort.
  3. Go over all rules and regulations: This part can be extensive, but it’s important to go over all the rules and regulations concerning the community and the board. To truly be valuable, the board member needs to understand what can and cannot be done by anyone associated with the community.
  4. Discuss the past, present and future: While the new board member may not need to know that a leak was fixed 6 months ago, they may need to know if someone was recently robbed or if there have been multiple complaints about the gate to the pool. Things that have happened in the past affect decisions that you make in the future, so it’s important to go over everything that the board member may need to know from past problems to current predicaments and future projects.
  5. Check in: Once the board member begins to serve, make sure you check-in to see that they are comfortable in their position and have everything they need to get the job done. Ensure that they aren’t afraid to ask questions and that they understand what is expected of them and how to meet those expectations.

A newly elected board member means new potential opportunities for the community association as long as the board member is ready to serve. He or she may bring ideas you have never thought of or have a solution to a problem you didn’t even know you had, but in order to reach their full potential in their position, they have to know what they are getting themselves into. It’s your responsibility to help them get settled in and ensure that they have everything they need to bring value to the board and the community association they are serving.

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Miami-Dade County New Ordinance

New Miami-Dade County Ordinances went into effect on July 1, 2014.

PB Miami-Dade OrdinanceMiami-Dade new ordinances have gone into effect and every community association should understand what this means for them. In the past, a community association had no obligation to tell a prospective purchaser or renter why an application was rejected. The rejected purchaser or renter had limited options for relief. In some cases, rejected purchasers or renters would be told to file discrimination claims or hire an attorney

Miami-Dade County has taken away the associations’ abilities to keep their reasons for rejection hidden with the enactment section 11A-18.1. This new code sets timelines for the associations to respond to the applicants and to provide notifications of incomplete applications. While some of the timelines and rules might conflict with some associations’ existing regulations, the ordinance creates a rebuttable presumption that an asso-ciation that does not comply with the ordinance’s requirements has acted in a discriminatory manner.

To learn what this means for Miami-Dade associations, download our Miami-Dade County New Ordinance.

About PeytonBolin
PeytonBolin, PL is a Florida-based law firm headquartered in Fort Lauderdale with offices in Orlando, St. Petersburg, Tampa (by appointment only), and West Palm Beach (by appointment only). PeytonBolin is focused on the practice of Community Association Law, providing legal services to associations and individual owners.  Partnering with condominium and homeowner associations throughout Florida, PeytonBolin PL provides collections services, covenant enforcement, and guidance to boards to successfully manage their community affairs. Representation for both associations and individuals encompasses the key areas of insurance, construction, contract disputes and debt collection. At PeytonBolin, we are committed to practicing law in a way that is refreshingly unique – always accessible and never pretentious. Obtaining our clients’ objectives in the most strategic, creative and economically efficient way possible is our highest priority. PeytonBolin, PL was named as the only Readers’ Choice 2014 platinum level law firm for Legal Services in Florida (its highest ranking) by the Florida Community Association Journal.

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PeytonBolin Nominated for Second Annual FLCAJ Readers’ Choice Award

PeytonBolin has been Nominated for Florida Community Association Journal’s Second Annual Readers’ Choice Award.

FLCAJ-ReadersChoiceLogoBack in January, Peyton Bolin was awarded the FLCAJ (http://www NULL.fcapgroup Readers’ Choice Award for Legal Services, and we are proud to announce that we have just been nominated again! The award winners will be announced on January 15, 2015 at a special ceremony at The Show in West Palm Beach. Readers’ Choice Awards are organized by business and category and, as was the case last year, will have three levels of achievement: Diamond, Platinum, and Gold.

The level of achievement is directly related to the number of votes cast for the service provider, so please vote for us an help us secure an award for the second year in a row! To vote for PeytonBolin for the FLCAJ Readers’ Choice Award, click here (http://www NULL.flcaj NULL.cfm) and check out the photo below of last year’s award!

FLCAJ Readers' ChoiceAbout PeytonBolin
PeytonBolin, PL is a Florida-based law firm headquartered in Fort Lauderdale with offices in Orlando, St. Petersburg, Tampa (by appointment only), and West Palm Beach (by appointment only). PeytonBolin is focused on the practice of Community Association Law, providing legal services to associations and individual owners.  Partnering with condominium and homeowner associations throughout Florida, PeytonBolin PL provides collections services, covenant enforcement, and guidance to boards to successfully manage their community affairs. Representation for both associations and individuals encompasses the key areas of insurance, construction, contract disputes and debt collection. At PeytonBolin, we are committed to practicing law in a way that is refreshingly unique – always accessible and never pretentious. Obtaining our clients’ objectives in the most strategic, creative and economically efficient way possible is our highest priority. PeytonBolin, PL was named as the only Readers’ Choice 2014 platinum level law firm for Legal Services in Florida (its highest ranking) by the Florida Community Association Journal.


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4 Tips for Creating a Meeting Agenda

Meeting Agenda Tips for Getting the Most out of Community Association Meetings

Meetings don’t always run smoothly, especially in community association meetings. People have different opinions, focus strays and many times you’ll only realize you forgot to go over something important once the meeting is already over and everyone went home. When you have to discuss important issues and make decisions as a group, it’s essential to have a meeting agenda to ensure that you stay on topic and address everything that needs to be addressed.

 4 Tips to Effective Community Association Meetings peytonbolin

Here are 4 tips to creating a meeting agenda that you will actually use:

  1. Include meeting information: Send out an agenda before every meeting and make sure to include the time and location of the meeting. The agenda should answer any questions that attendees need to know before the meeting starts.
  2. Determine the focus: What is the goal of the meeting? Determine what needs to be accomplished and make sure everyone is aware. Be clear on whether the meeting is just for brainstorming or if a decision needs to be made. Attendees will not be able to fully participate if they don’t know ahead of time which topics the meeting will cover and what the goals are.
  3. Include time allotments: Including time allotments will help keep you on track and reduce the chances of moving into a discussion about something not relevant to that specific meeting. Of course you sometimes need to be flexible, but having a general idea of how the meeting will run before it starts is essential to making the most out of your time together.
  4. Determine roles: Decide who is responsible for what before the meeting starts. Make sure everyone is clear on who is going to lead the meeting and be clear on what, if any, information attendees need to prepare beforehand.

These may seem like simple tips, but holding a meeting should be simple. As long as you are prepared and all attendees have all the information they need, you’ll reduce the likelihood of tardiness, getting off topic, and generally just wasting time in a meeting. Use these tips to help you create a meeting agenda template so that you can consistently stay on task and hold effective meetings that get to the point and in which you accomplish everything you need to get done.

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Fannie Mae Loses Case Over $100K In Fees

The Daily Business Review published an article concerning PeytonBolin’s win in the case of Alden Hotel Condominium Owners Association vs. Fannie Mae. Click here (http://www NULL.dailybusinessreview to check it out online or see the complete article below.

Fannie Mae Loses Case Over $100K In Fees

Fannie Mae Loses Case DBR

Mauri Peyton

Samantha Joseph, Daily Business Review

Fannie Mae was on the losing end of another condo association battle for overdue fees on foreclosed property.

The Federal National Mortgage Association went up against Miami Beach’s Alden Hotel Condominium Association in a dispute over more than $100,000 in delinquent dues on a foreclosed unit.

Third District Court of Appeal Judges Kevin Emas, Vance Salter and Ivan Fernandez affirmed the decision by Miami-Dade Circuit Court Judge Spencer Eig and ruled for the condo association.

PeytonBolin featured in Daily Business Review

“That case on its face proves that safe harbor is an affirmative defense,” said PeytonBolin founding member Mauri Peyton, who represented the association. “Fannie Mae has to prove that it owns the mortgage. And if they don’t prove it, they don’t get the safe harbor.”

Fannie Mae took over the unit and sought protection under state law, which shields lenders who recover foreclosed property. State law requires new owners of foreclosed condos to pay all overdue maintenance fees. But a safe harbor rule allows lenders to pay a year’s worth of late fees, or 1 percent of the mortgage, whichever is less, when they reclaim foreclosed units. Citing that provision, Fannie Mae sought to pay Alden only about $25,000.

“It’s not just typical; it’s almost universal. My experience with Fannie Mae is they don’t pay anything until they’re ready to sell the unit, and then they won’t pay anything until they get the safe harbor,” said Peyton, who represented the association along with colleague Michael Mayer. “They knew they owed the safe harbor amount, which is about $25,000, but they refused to pay until the association agreed that was all they owed.”

The court’s opinion April 2 is one of two against Fannie Mae in recent months.

On May 28, Broward Circuit Judge Sandra Perlman ruled in favor of a Pompano Beach association when she denied Fannie Mae’s complaint for declaratory relief against Park Place. That case, like Alden’s victory, hinged on whether Fannie Mae could benefit from safe harbor that protects only first mortgage holders, their successors or assignees.

Defense attorneys in both cases successfully argued that while the federal mortgage corporation guarantees securities sold by lenders, it’s rarely legally assigned these mortgages. With Park Place, for instance, documents listed Countrywide Home Loans Inc., which was bought by Bank of America Corp., as the lender and the Mortgage Electronic Registration Systems Inc. document clearinghouse as the mortgagee.

While Fannie Mae bought the loan and retained Countrywide Home Loans Servicing LP to service it, documents showed that when it came to the mortgage, MERS assigned it to Countrywide’s successor, BAC Home Loans Servicing LP, not Fannie Mae.

“Fannie Mae argues that it is entitled to the benefits of the safe harbor provision because it took title of the condominium unit through a foreclosure as the first mortgagee,” Perlman wrote in a six-page decision dated May 28. “Contrary to this assertion, however, the summary judgment evidence reveals MERS, and not Fannie Mae, was the first mortgagee under the subject mortgage.”

The Third DCA judges reached a similar conclusion in the Alden appeal.

Brandon Thompson of Levine Kellogg Lehman Schneider & Grossman represented Fannie Mae. The national mortgage firm said its lawyers do not issue statements on its behalf, and a call for comment to Fannie Mae was not returned by deadline.

Meanwhile, at least two condo associations are celebrating their victories, which they say give condo associations recourse to regain delinquent fees.

“Fannie Mae is never in the chain of title,” Peyton said. “If you buy a car, regardless of who’s driving it, it’s very clear who holds the title.” In this case, the mortgages never went to Fannie Mae, and they never had title.

Read more: (http://www NULL.dailybusinessreview
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Florida Passes New Law Encouraging Private Flood Insurance

The Florida Private Flood Insurance Market

When you live in Florida, floods are a real concern. Anyone who has been through a hurricane has seen the major effects it can have, and Florida Gov. Rick Scott has signed a bill into law that would give Floridians more choices when it comes to flood insurance.

Florida Passes New Law Encouraging Private Flood Insurance PeytonBolin
The legislation is designed to encourage private insurers to offer flood insurance, giving them four options from standard coverage (which is basically what Floridians currently have under the National Flood Insurance Program) to three other enhanced coverages. The bill was a reaction to the Biggert-Waters Insurance Reform Act of 2012 which expanded flood zone areas, forcing more people to buy coverage, and raised some flood premiums in order to address the major shortages in the National Flood Insurance Program because of hurricanes Katrina and Sandy.

Private insurers offering flood insurance are able to set their own rates until October 1, 2019, giving them time to better understand which properties are at the highest risk and develop rates, and now flood insurance coverage can be better tailored to the policyholder’s needs. Reactions to the new law have been mixed, with some believing this is a great move forward for Florida and others who don’t see the private market taking off anytime soon.

Remember, as a property manager or community association, you’re responsible for the safety of your guests. Make sure you know the facts about flood insurance, especially during hurricane season, and let your community know what you’ve learned. An informed community is a happy community, and it’s up to you to keep them informed. If you wait until it’s too late, a flood can having a devastating effect on not only the residents of your community, but also in common areas and administrative offices. Protect yourself and your community by learning more about the Florida flood insurance market today.

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New FL Condo and HOA Laws

New Condo and HOA Laws have been passed in the state of FloridaNew FL Condo and HOA Laws

The Florida legislature recently passed bills HB 807,HB 7037, and SB 440, that the governor has signed into law. These changes went into effect on July 1, 2014, so we wanted to provide you with a quick update on some of the changes made. This update is not intended as legal advice, and the below information does not include complete update information. For a full recap, stay tuned for our 2014 Legal Update!


Florida Statute 468.431- Notable Revision To The Definition Of Community Association Management
The statute stated “[c]ommunity association management is any of the following practices requiring substantial specialized knowledge, judgment, and managerial skill when done for remuneration and when the association or associations served contain more than 10 units or have an annual budget or budgets in excess of $100,000: controlling or disbursing funds of a community association, preparing budgets or other financial documents for a community association, assisting in the noticing or conduct of community association meetings, …”

The following has been added, along with new language about how a Community Association Manager should conduct themselves as agents of the association:

  • Determining the number of days required for statutory notices
  • Determining amounts due to the association
  • Collecting amounts due to the association before the filing of a civil action
  • Calculating the votes required for a quorum or to approve a proposition or amendment
  • Completing forms related to the management of a community association that have been created by statute or by a state agency
  • Drafting meeting notices and agendas
  • Calculating and preparing certificates of assessment and estoppel certificates
  • Responding to requests for certificates of assessment and estoppel certificates
  • Negotiating monetary or performance terms of a contract subject to approval by an association
  • Drafting pre arbitration demands
  • Coordinating or performing maintenance for real or personal property and other related routine services involved in the operation of a community association
  • Complying with the association’s governing documents and


Florida Statute 720.303 – Meeting Access For Handicapped Persons
Meetings must be held a location that is accessible to a physically handicapped person if requested by a physically handicapped person who has the right to attend.

An owner may consent in writing to the disclosure of other contact information

Florida Statute 712.05 – Marketable Record Title Act
Clarification of existing law relating to notification for purposes of preserving marketable title. The meeting of the board to preserve the covenants and restrictions must be mailed or hand delivered at least 7 days before the meeting to vote on the preservation of covenants. The association nor the clerk or court are required to provide additional notice pursuant to 712.06(1)(b).

Florida Statute 720.3085 – New Forms For Pre-Lien Notice & Pre-Foreclosure Notice, Removal Of Expiration Of Lien, New Requirements For Execution Of Claim Of Lien


Florida Statute 718.116 – New Requirement For Release Of Lien To Be In A Form And Pre-Foreclosure Notice To Be A Specific Form

Florida Statute 718.121 – New Form For Notice Of Intent To Foreclose

Florida Statute 718.111(5)(B)(1) – Abandoned Units – No More!
Associations may enter a unit and inspect and/or repair an abandoned condominium unit. This specifically includes the ability to repair or remediate for mold, and to turn on utilities – all at the board’s sole discretion.

Florida Statute 718.111(11) – Insurable Events
The legislature has added new language providing that in the absence of an insurable event, the association or unit owners are responsible for repairs, reconstruction, or replacement as provided for by the declaration or bylaws.

Florida Statute 718.111(12)(C)(5) – Owner Disclosure Of Information
New language that an owner may consent in writing to the disclosure of certain contact information.

Florida Statute 718.111(12)(F) – Outgoing Board Member Required To Turnover Records
An outgoing board or committee member must relinquish all official records and property of the association in his or her possession, or under his or her control to the incoming board, within 5 days after the election. The division shall impose a civil penalty as set forth in s. 718.501(1)(d)6. against an outgoing board or committee member who willfully and knowingly fails to relinquish such records and property.

Florida Statute 718.112 – Board Member Votes
A board or committee member’s participation in a meeting via real-time videoconferencing, Internet-enabled videoconferencing, or similar electronic or video communication counts toward a quorum and that such member may vote as if physically present; prohibiting the board from voting via e-mail.

Florida Statute 718.116 – Joint & Several Liability For Assessments
The term “previous owner” (in the phrase “a unit owner is jointly and severally liable with the previous owner for all unpaid assessment that came due up to the time for transfer of title”) has been clarified to NOT include an association that acquires title though foreclosure or deed in lieu of foreclosure. And, the present owner’s liability for unpaid assessments is limited to any unpaid assessments that accrued before the association acquired title to the delinquent property through foreclosure or by deed in lieu of foreclosure.

Florida Statute 718.117 – Condo Terminator
If the plan of termination fails to receive the required approval, the plan shall not be recorded and a new attempt to terminate the condominium may not be proposed at a meeting or by solicitation for joinder and consent for 180 days after the date that such failed plan of termination was first given to the owners.

Florida Statute 718.707 – Bulk Buyer Extension
A person acquiring condominium parcels may not be classified as a bulk assignee or bulk buyer unless the condominium parcels were acquired on or after July 1, 2010, but before July 1, 2016. This changed from July 1, 2015 to July 1, 2016.

Florida Statute 718.112(2)(A)(2) – Bylaws – Response To Unit Owner Clarified
When a unit owner of a residential condominium files a written inquiry by certified mail with the board of administration, the board shall respond in writing to the unit owner within 30 days after receipt of the inquiry. The board’s response shall either give a substantive response to the inquirer, notify the inquirer that a legal opinion has been requested, or notify the inquirer that advice has been requested from the division. If the board requests advice from the division, the board shall, within 10 days after its receipt of the advice, provide in writing a substantive response to the inquirer. If a legal opinion is requested, the board shall, within 60 days after the receipt of the inquiry, provide in writing a substantive response to the inquiry. The failure to provide a substantive response to the inquiry as provided herein precludes the board from recovering attorney’s fees and costs in any subsequent litigation, administrative proceeding, or arbitration arising out of the inquiry. The association may, through its board of administration, adopt reasonable rules and regulations regarding the frequency and manner of responding to unit owner inquiries, one of which may be that the association is only obligated to respond to one written inquiry per unit in any given 30-day period. In such a case, any additional inquiry or inquiries must be responded to in the subsequent 30-day period, or periods, as applicable.

Florida Statute 718.112(2)(B)(2) – Proxy Clarification
Clarifies that owners of a residential condominium may not vote by general proxy, but may vote by limited proxies substantially conforming to a limited proxy form adopted by the division. Residential condominium owners may not use proxies, general or limited, for elections.

Florida Statute 718.1255 – Nonresidential Condominium Associations
Exempting nonresidential condominiums from mandatory arbitration unless specifically provided for in their declarations.

Florida Statute 718.403 – Developer Changes
Relating to the authority to develop a condominium in phases; authorizing the developer to modify the plot plan as to unit or building types; limiting the circumstances under which a plot plan may be modified as to a residential condominium to only the extent that such changes are described in the declaration; specifying the provisions relating to phase condominiums that are inapplicable to nonresidential condominiums specifically paragraphs (2)(b)-(f).

For a complete recap of the new changes, be sure to stay tuned for our 2014 legal update!

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In Florida, Condo Battles Play Out

PeytonBolin featured in Wall Street Journal

One of our cases is featured in the Wall Street Journal with a quote by PeytonBolinattorney Michael Mayer.  To check it out online click here (http://online NULL.wsj or you can see the complete article below.

In Florida, Condo Battles Play Out - Fallout From Real-Estate Bust Now Pits Developers vs. Unit Owners

By Kris Hudson And Arian Campo-Flores

The drama of Florida’s boom-then-bust real-estate market is now playing out in the courts as condominium owners and real-estate developers square off over forced sales under a law initially intended to allow for hurricane-damaged condo complexes to be rebuilt quickly.

The battle has been percolating since the market collapsed in 2007-08—which left both developers and condo owners facing steep losses—and now various developers want to reverse unfinished efforts to convert rental-apartment complexes into for-sale condos.

The problem is that, after a decline in condo values during the downturn halted sales, these developers are finding themselves with buildings that are composed mostly of apartments they still own and partly of condos owned by individuals. That mix is unworkable for several reasons. Foremost, it impairs developers’ ability to make changes to the complexes’ common areas, like pools or roofs, because such changes require approval and capital from all condo owners in the complex.

All told, 163 complexes in South Florida languish today as part condo and part rental after their conversions failed in the downturn, according to Jack McCabe, CEO of McCabe Research & Consulting LLC, a research firm in Deerfield Beach, Fla. On a statewide level, the number is “probably close to 400,” Mr. McCabe said.

Now, some developers have found a solution in Florida’s 2007 amendment to its condo statutes, which streamlines the process for terminating complexes’ condo statuses, though it is a fix that leaves some individual condo owners faced with selling their units to developers at big losses. That drawback has resulted in holdout condo owners across the state suing the developers and investors buying up their complexes.In Florida, Condo Battles Play Out

That situation is playing out at the 364-unit Via Lugano condominium complex in Boynton Beach, where real-estate investor Northland Investment Corp. has acquired 90% of the units since 2008 in a bid to capitalize on the 2007 amendment.

But the effort hasn’t gone over well with 27-year-old Ileana Paan, a college student and business owner, who with her family’s help paid $309,900 for a two-bedroom Via Lugano unit in 2006. Late last year, Northland offered less than half of that. After Florida condo values plummeted in the downturn, the most recent appraised value was $74,000.

In June, Ms. Paan and 12 other Via Lugano owners sued to block the termination. “This is a nightmare,” Ms. Paan said. “It has emotionally debilitated me. I get so angry. How could I lose this place? It’s mine, for crying out loud.”

After being contacted for this article, Northland withdrew its termination application. “We believe the Florida statute governing condominium termination presents issues of fairness,” the company said in a statement.

Michael Mayer, the plaintiffs’ attorney, said he won’t withdraw the lawsuit because “our clients’ constitutional rights remain in jeopardy.”

Shirley Lofgren, who paid $217,500 in 2007 for her condo at the 368-unit Serenity at Tuskawilla complex near Orlando, is going through a similar dispute. Real-estate investor Prestwick Partners LLC of Miami, which owns more than 80% of the units in her complex, is trying to remove the remaining condo owners so it can fully convert the complex to rentals.

In June, Prestwick offered the 84-year-old Ms. Lofgren $45,356 for her unit, said her son-in-law, Bob Mattis. She doesn’t want to sell. “It is totally infuriating,” he said. “That [condo] is all she has to her name.”

Representatives of Prestwick didn’t return messages seeking comment. Another owner at the complex sued in state court this month to block Prestwick; the case is pending.

Returning failed conversion projects back to rentals is a common use of the condo-termination law these days. “It is a classic case of unintended consequences” of the 2007 amendment, said Michael Gelfand, a West Palm Beach condo-association attorney who helped draft the legislation.

The current law came about in 2007, when lawmakers amended Florida’s condo statutes to lower the thresholds for terminating complexes’ condo status—changes inspired by several storms in 2004 and 2005 that left complexes so damaged that many owners couldn’t afford nor agree upon repairs. An ideal way to rebuild such a complex is for the owners to sell it to a developer with the capital to make the repairs and reopen it, often as rentals. But, first, its condo status must be removed.

The 2007 amendment established that, to terminate a condo designation, at least 80% of a complex’s owners must approve. Second, to block a termination, 10% or more of the complex’s owners must object. Any holdouts on the losing end of a vote must be paid fair-market value for their units by the complex’s buyer. The 10%-objection threshold was aimed at allowing the majority’s will to prevail.

Before 2007, the requirement in most cases for termination was unanimous approval of owners involved. But the process could be blocked by a lone holdout owner, leaving municipalities and developers stymied in their rehabilitation efforts.

Lawmakers also extended the termination guidelines to undamaged complexes, mostly to accommodate efforts to redevelop aged, obsolete complexes. That opened the door for the guidelines to be applied to failed condo conversions to revert them entirely to rentals. In many cases, the developers applying to terminate a complex’s condo designation already own 80% or more of its units because they never succeeded in selling the units as condos in the first place. Some 235 Florida complexes, about 1%, have ended their condo status since 2007. The state doesn’t track whether terminations are contested.

Legal experts say the Florida condo-termination law can be seen as a “functional equivalent” of eminent domain, the process in which a government entity compels the sale of private property at fair-market value, sometimes on behalf of a private party, for economic development. “It appears to be pretty much the same thing,” said Robert Hockett, a law professor at Cornell University.

Now, Florida lawmakers are pondering tweaking the law further.

“I think something has to be done for the [condo owners] who must leave their property involuntarily but owe more than it is worth,” said George Moraitis Jr. , a state representative from Fort Lauderdale. “But it’s hard when you start trying to mitigate the market” by trying to account for future changes in property values.


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