Floridians forced to sell
Al Jazeera America
by David Martin
06 February 2015
ORLANDO – When Amanda Gonzalez bought her two-bedroom condominium near
Orlando in 2006, she thought she was getting a foothold on the America
Gonzalez never missed a payment for her mortgage, condo fees or taxes,
even after the real estate crash in 2008 and 2009. When she was laid up
after an accident, and money was tight, she still kept her books in
order. So it came as a shock when the company that sold her the unit
told her the complex was being converted into rental apartments
("terminated"), and that she had to accept what the company offered –
far less than what she had paid.
The same lawyers that sold Amanda Gonzalez her condo for $181,450
forced her to sell it back for a quarter of that amount. America Tonight
Under a Florida law, companies that own more than 80 percent of condo
units in one building can terminate a condo complex under certain
conditions and turn it into apartments for rent. The companies have to
pay the owners they're evicting the "current market value" for their
units, which may not even cover their mortgage. Some owners, who have
diligently paid their bills and fees, are left without a home and
drowning in debt.
“I thought we lived in a country where your property couldn’t be seized
for private gain,” Gonzalez said. “And this blows me away that this is
possible in the United States. It blows me away.”
According to Seminole County records, Gonzalez purchased her unit at
Serenity at Tuskawilla from Prestwick Partners, a boutique property
company run by two Miami lawyers. After Florida’s real estate crash,
she had no intention of selling her unit; she figured its value would
eventually bounce back. But she never got that chance. In 2013,
Prestwick Partners filed papers to terminate the condominiums at
Serenity at Tuskawilla.
“If people are too lazy to read the fine
print, that’s their problem.”
Half of Prestwick Partners
Appraisers paid by the new owners assessed Gonzalez's unit to have a
fair market value that was just a fraction of what she paid. She had no
choice but to sell at that price; she says Prestwick Partners told her
they technically already owned her unit.
"I paid them money up front and now they’re buying it back for pennies
on the dollar," she said. "I’d love that deal. Sign me up."
Last week, Gonzalez said her lender allowed her to walk away from her
mortgage – a “short sale” – but her credit is ruined, an embarrassment
for someone who runs an accounting business.
“It’s humiliating from a professional standpoint. It’s frustrating from
a personal standpoint," she said. "It feels like such a violation to go
Shirley Lofgren is fighting her termination. But if she's forced out at
the price Prestwick Partners is offering, she would lose a lifetime of
savings. America Tonight
Shirley Lofgren, 85, paid $217,500 for her Serenity condo – almost all
of it in cash – when she moved to Florida in 2007 with her husband,
Robert, who's since been diagnosed with Alzheimer’s and now lives
nearby. She says Prestwick Partners is offering her an assessed value
of $46,500. If she took the offer, it would wipe out the equity she
spent a lifetime to build, and she doesn’t have enough cash to buy
“I thought when you owned something you owned it,” Lofgren said.
“There’s no question of morality in
She's hired a lawyer and is fighting the condo termination. A few other
condo owners have sued and settled for undisclosed amounts. But the men
behind Prestwick Partners, Daniel Marzano and Michael Cosculluela,
insist the firm's actions are 100 percent legal and were spelled out in
the condominium declaration.
“If people are too lazy to read the fine print, that’s their problem,”
Daniel Marzano said in a phone conversation with America Tonight.
When pressed on whether their actions were moral, Michael Cosculluela
replied: "There's no question of morality in business."
Lansbrook Village residents say a consortium now owns 87 percent of the
units in the complex, and they've been warned a termination is
coming. America Tonight
Florida's 2007 condominium termination law was designed to help
developers salvage aging or storm-ravaged properties that would cost
more to repair than they were worth. Many condo association agreements
require 100 percent of unit owners to agree on a major decision like
selling the property or converting it to apartments, and in some of
these cases, finding all the owners was simply impossible.
The law lowers the bar. It allows for a developer who owns 80 percent
of the units to terminate a condominium complex, unless 10 percent or
more of the residents object. If an investor owns more than 90 percent
of the units, there’s nothing a condo owner can do to stop the takeover.
In the depths of Florida’s real estate crash, blocks of unsold condos
hit the market at cut-rate prices. But as Florida's rental market has
gained strength, the state's condominium developments have become
attractive targets for investors. And they're using the law to force
owners to sell.
“I thought we lived in a country
where your property couldn’t be seized
for private gain.”
Amanda Gonzalez former Florida condo owner
Some 271 condominium complexes have been terminated in Florida since
the law passed, according to state records, affecting nearly 20,000
In 2005, Joe Cunningham, a retired Philadelphia cop, and his wife Linda
Cunningham, a retired school teacher, were hoping to split their
retirement years between Florida and Cape May. So, they bought a
$240,000 condominium in a Lansbrook Village, a new, manicured 774-unit
complex near Tampa, paying $160,000 upfront.
If the termination goes through, Joe and Linda Cunningham will have to
give up their retirement plans of snowbirding in Florida. America
The story of Lansbrook Village is typical of Florida's real estate
collapse. In 2008, three years after building Lansbrook, the original
developer faced a foreclosure on the property. Then, the bank that
backed the project was declared insolvent, so the Federal Deposit
Insurance Corporation oversaw the auctioning off of its assets for just
pennies on the dollar. A huge block of units found its way into the
hands of BR Carroll Lansbrook, formed by Blue Rock Investments in New
York and the Carroll Organization in Atlanta. That consortium now owns
more than 80 percent of the units in the complex. The Cunninghams and
their neighborhoods have been told a termination is coming.
"I didn't fight in Vietnam so someone could take my property away from
me," said Joe Cunningham, a decorated veteran. If the complex is
terminated at the current market value of $80,000, they said they’d
lose their entire investment. Like other owners we spoke to, the
Cunninghams are current on their mortgage, property taxes and homeowner
“We’d have nothing. We would get nothing back,” Linda Cunningham said.
Blue Rock Investments did not respond to calls and emails. Patrick
Carroll, founder and CEO of the Carroll Organization, declined through
a spokeswoman to appear on camera. Questions emailed to Carroll about
BR Carroll’s intentions for Lansbrook Village went unanswered.
But in a news release last year, the Carroll Organization called
Lansbrook "an excellent investment opportunity." The privately held
company cited its attractive location, “value-add” potential and a
price tag lower than building a new development. On its website, the
firm continues to boast about its "buying spree" in Florida.
Nobody helping us
Stephanie Krasowski says she'll be forced to file bankruptcy if her
complex is terminated. America Tonight
Not far from the Cunninghams, Stephanie Krasowski said she'd be plunged
$100,000 in debt if she loses her legal battle to stop the termination
at a complex called Madison Oaks. In her case, the owners are using the
condominium association’s bylaws to convert the complex from condos to
A statement from Madison Oaks Partners LLC, which owns most of the
units, said Madison Oaks is a “failed condominium” complex in danger of
falling into “irreparable neglect.”
“This has never been a failed community. We are 100 percent occupied,”
Krasowski countered. She's formed the organization Floridians Against
Condo Takeover to rally condo owners facing terminations and to urge
lawmakers to amend the law.
“There are no agencies in the state of Florida that are regulating what
these bulk buyers or investors are doing," Krasowski said. "They're
literally coming in here, doing whatever they feel that they can do,
and getting away with it. There's nobody helping us."
If the termination goes though, Krasowski said she'd have no choice but
to file for bankruptcy
The state Department of Business and Professional Regulations records
how many terminations take place, but a spokeswoman said the statute
does not give the agency authority to regulate terminations.
State Rep. Chris Sprowls, a newly elected Republican in Krasowski’s
district, is drafting a bill amending the state’s condo termination
bill when Florida’s part-time legislature begins its 60-day session in
But it might be too late for the Cunninghams and thousands of other
Florida condo owners living under the threat of a takeover. If theirs
comes to pass, the Cunninghams say their $160,000 investment would
simply evaporate, as would their dream of spending the winter months of
their golden years in Florida.
“We’ve worked all our lives. We’ve been very responsible financially,"
said Joe Cunningham. "Yet someone could come in and take our home away
Also see: Owners