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From Alexander Dobrev
Dear Santa...
Can We Please Have An Extension of the Florida Distressed Condominium Relief Act ?
In a little over 6 months (on July 1, 2012), the window of "limited liability" opportunity currently available to investors and foreclosing lenders acquiring units in Florida's distressed condominium projects will officially close. As a reminder, the Distressed Condominium Relief Act marked a dramatic shift in Florida law, encouraging the bulk acquisition of condominium projects by protecting the acquirer against some significant liabilities which could be inherited from the original developer (a.k.a. "successor developer" liabilities), while allowing the acquirer to retain certain useful and valuable rights with respect to the operations, repositioning and eventual disposition of the assets.
As the Act's sunset date of July 1, 2012 approaches, liability concerns relating to statutory warranties on units and common elements, unfunded reserves, past due assessments or deficit funding obligations, the acts and/or omissions of the prior developer's board of directors, and the like, are likely to increase and to add downward pressures on the still distressed condominium market.
That said, help may be on the way. There are currently two bills making their way through the Florida legislature - House Bill 319, and Senate Bill 680. Among many other matters relating to residential properties, including condominiums, both bills seek to push back the sunset of the Distressed Condominium Relief Act by 3 years, to July 1, 2015. So far (as of December 7, 2011) the House Bill has successfully navigated its way (albeit with 5 amendments) through the House's Civil Justice Subcommittee. The Senate Bill has been referred to the Regulated Industries, Judiciary, and Budget Subcommittees.
Stay tuned for updates as this process unfolds.
© Lowndes, Drosdick, Doster, Kantor & Reed, PA, 2012. All rights reserved.About the Author
