Ryan Ray
A bill to continue Great Recession-era relief to homebuilders and bulk buyers of bank-owned condominiums was approved in House Finance & Tax during a Monday afternoon meeting held specifically to consider the proposal.
HB 791 sponsored by Rep. George Moraitis — the sole Republican among the Broward delegation — was the subject of a 45-minute debate period, mostly driven by concerns from the panel’s Democratic members over the rights of condo tenants. They say such owners are at risk under the current state of affairs, which was designed to encourage capital investment in distressed or failed condominium projects.
Under Florida’s complex Talmud of condo law, unit owners within an association exercise collective ownership over their buildings by way of votes on the way their fees are appropriated. It extends even to the details of the condo’s legal arrangement — including potentially dissolving the condo association.
If a bulk buyer snatches up enough units to create a majority on an association’s board, they could choose dissolve the association and in the process displace their neighbors who no longer own a share in it.
One component of such arrangements is a doctrine called estoppel letters, wherein a condo association can prevent a tenant from taking the association to court by way of an extra-legal maneuver supported by the Florida Homebuilders Association and opposed by The Florida Bar.
Lantana Democrat Rep. Lori Berman said that under some scenarios, condo dwellers have been forced out of their homes when bulk buyers buy up distressed or unsold units and then reimbursed them at only “pennies on the dollar.”
Ocoee Rep. Randolph Bracy echoed her concerns, going so far as to say that besides “bailing out the banks” that own failed condo properties by allowing them to sell depreciating assets off to bulk buyers, “I don’t see the benefit to the community.” Rep. Richard Stark offered an amendment to remove the sunset continuation, but that amendment was defeated.
Moraitis says the extension until 2018 provided for in his bill offers time for the policy’s most prominent stakeholders — the condo law section of The Florida Bar and Florida homebuilders — to hash out a final settlement to the issue.
Rusty Payton of the Florida Homebuilders Association, major proponents of the bill, joined Moraitis at the dais in a clear signal that the industry was heavily invested in keeping their temporary inducements alive.
Ultimately Moraitis’ bill carried the day, passing despite “no” votes from Reps. Berman, Bracy, Stark and Jose Javier Rodriguez who also spoke against the bill as Democrats took something of a Finance & Tax caucus position in opposition of the measure. The bill also won the wildcard Republican vote of Rep. John Tobia.
