Peter Schorsch
Another week goes by, and no decision from the 3rd District Court of Appeals (DCA) on the Biscayne 21 case.
A whopping 34 opinions were released on Wednesday, Oct. 2, but nothing that would signal some relief for the brewing condo crisis.
Meanwhile, Florida’s condo crisis worsens.
As the deadline for structural integrity requirements approaches, condo owners in older buildings face steep assessment fees to ensure the safety of their buildings. Many are desperate for an exit ramp.
ABC Action News recently cited a Redfin report that indicates condo HOA fees in Tampa are up 17% year over year, the highest jump in the nation.
The high fees are forcing many to sell, but properties are slow to move. Those that do sell may sell at a loss.
CBS Miami reported last month that condo sales in buildings 30 years or older are selling 20% lower than they were at the start of the year.
One obvious solution for owners in older buildings is to invite bids from developers who have the means to tear down and rebuild. Oftentimes, developers will pay a better price for prime locations than owners could get on the open market.
But the Biscayne 21 case has developers on edge. Many developers are hesitant to invest until this legal dispute is resolved.
At Biscayne 21, located at North Bayshore Drive in Miami, the vast majority of owners recognized the costs to shore up the building and maintain their 60-year old building could very well exceed its current value or their means to pay for it in the near future. Of the 192 units in the building, 96% opted to sell to a developer, which began the process for termination of the condo association.
Under current state law, condo associations can move forward with terminations with 80% of owners’ approval. But the few holdouts at Biscayne 21 insisted state law did not apply to their situation. The 10 who refused to terminate took the developer to court.
In March, Florida’s 3rd DCA ruled against Two Roads Development, siding with the fraction of owners at Biscayne 21 who refused to sell. Two Roads has called for a rehearing. More than six months have gone by, and there’s been nothing but crickets from the 3rd DCA bench on this case.
While the case is about just one condo building, the decision could impact nearly every condo owner in Florida.
“If the ruling in Miami-Dade last (March) on Biscayne 21 stands, Florida condo owners are left with fewer rights and even fewer options. While they currently have the right to consider exit ramps and pursue pathways to termination, the new ruling gives one hold out veto power,” explained Rep. Vicki Lopez in an op-ed in the Miami Herald.
“Just one individual could stand in the way of the desires — and what may be in the best interest — of the vast majority of owners. Without options, condo owners across the state will be saddled with financial burdens and obligations, even the possibility of foreclosure.”
Every developer with an interest in Florida is watching — and waiting — for a decision on the case. Until then, they’re hesitant to spend more money in a market that may not generate any investment.
Ancona Real Estate agent Stefania Mogollan told CNBC last month that options for owners in older condo buildings are extremely limited at this time.
“If they don’t have the funds to cope with these assessments, there’s not much they can do,” Mogollan said. “There’s nobody willing to purchase a property and cope with these expenses; there’s not much you can do.”
Gov. Ron DeSantis has been holding a series of panel discussions around the state with condo owners about the challenges they face and potential solutions.
Should the 3rd DCA opine on Biscayne 21 next week, though, maybe there will be clarity for developers and new confidence in potential investment opportunities. Until next Wednesday, they watch. And they wait.
