Remember that thick stack of paper that you received when you purchased a condo? Did you thoroughly read all those condo documents?
In the hot market, developers in Florida were converting apartment buildings to condominiums as fast as they could purchase them - these were "condo conversions". Apart from design considerations, you had to look out for sound conditioning, construction quality, when and how the upgrades would be done.
As the market slowed, some owners found themselves in two unexpected situations:
- one of only a few occupants - the rest of the units were vacant;
or
- one of the few owners in a building with mostly tenants.
An "obscure" amendment to the Florida condominium statute, intended for rare cases of hurricane destruction, can be of far more significance. Some condominium declarations state that if a converted apartment project fails as a condominium, the developer (owning the majority of the condo units) can purchase the purchased units back from buyers at "fair market value", even if the condo owner does not want to sell.
So - you may be settled in to the condo you purchased a few years ago, and be forced to sell back to the developer at today's value, often well below your purchase price.
What about property rights? There could be prolonged litigation, but in the meantime - you can be forced to take a loss and sell, IF your condominium declaration has that provision. And if you have to sell at less than your mortgage amount? Not a nice situation.
Scary thoughts for a Saturday night.
Read the entire article that appeared in this morning's Tampa Tribune.
