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Volume XII, Number 267

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Condo Relief -- Extension of the Florida Distressed Condominium Relief Act ?

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, 2022. All rights reserved.National Law Review, Volume I, Number 346
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About this Author

Alexander Dobrev, Lowndes Law Firm, Distressed Real Estate Solutions lawyer, condominium projects attorney
Partner

Alex Dobrev is a Shareholder in the Distressed Real Estate Solutions Group. He also serves as the Vice-Chair of the Condominium & Planned Development Committee of the Florida Bar, as well as its legislative Co-Chair.

Since the recession, Alex has focused a substantial portion of his practice on distressed properties acquisitions, operations and dispositions. In the context of “broken” or “fractured” condominium projects in particular, he often works with lenders, bulk investors, and receivers, in order to evaluate and implement exit strategies, including possible unwinding of...

407-418-6445
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