Law eases sales of distressed condos
I’m convinced that condominium living is one of God’s special little ways of testing us. On the one hand he provides us with a carefree, maintenance free lifestyle lacking in responsibilities outside of our front door, and on the other hand he forces us to live with our business partners. And since not all partners live up to their business obligations, carefree living can quickly evaporate.
Effective July 1st, a new law governing certain aspects of Florida condominium living took effect.
The Distressed Condominium Relief Act is a mixed bag of changes to previous regulations governing condominiums that are in foreclosure in Florida. The spirit of the law is to make purchasing foreclosed condominiums easier as well as providing some financial relief to condominium associations and their property owners.
One of the major changes in the bill affects what are known as bulk buyers, that is, a buyer who purchases more than seven units in the same condo project. Under the new law these buyers will not have to assume liabilities of the original developer such as being responsible for flaws in the buildings. This will make it easier for bulk buyers to get Fannie Mae loans, providing an incentive to purchase some of the abundant inventory on the market. Although our area fortunately does not have a lot of vacant condominium units that were bought by speculators, the entire state of Florida will benefit if these distressed properties can be sold.
Another major change in the law relates to past due condominium fees on foreclosed properties. Under the current law, foreclosing lenders are liable for a maximum of only six month’s past due fees or 1 percent of the unit’s original mortgage, whichever is less. Effective July 1st, the condominium association can collect 12 month’s past due fees or 1 percent of the unit’s original mortgage, whichever is less. This change may or may not have a positive effect on what can be collected based on the monthly fees and the original mortgage. Most associations feel this did not go far enough to help reimburse owners in associations where they have been carrying unpaid association fees on foreclosed units.
A few other points in the new law relate to delinquent owners not being permitted to use common elements of the association, delaying requirements for installation or upgrades to certain systems in older condominiums, and collecting rent from tenants who are renting from delinquent unit owners. Some of these changes have teeth and will help associations and some are merely symbolic.
While we’re on the subject of condominiums, for those of you who haven’t heard the cries from Island residents yet, the Perico Island project is back on. Minto Communities LLC who purchased the Seven Shores condo project property from St. Joe Company last year is planning on going forward with development starting this year. The number of units and buildings is still being finalized, however, the original plan called for 684 units. Minto’s price point is considerably lower than St. Joe’s - $700,000 with condo units priced in the mid-$300,000's. This news may not make Island residents who will be looking at the development happy, but it is somewhat good news that developers feel confident enough in our area to go forward with an ambitious project.
Florida and condominiums have been going hand in hand for close to 50 years and the state will eventually dig out of the current problem. When that happens and we’re back on the road to carefree living. I’m sure God will find something else to challenge us with, let’s hope it’s not brown and sticky.