Amendment to Florida’s termination of condominium law
Freddy X Muņoz
Perez and Rodriguez, P.A.
On June 16, 2015, Governor Rick Scott signed into law a Bill that
amends Section 718.117, Florida Statutes, to grant a slew of new
protections to condominium unit owners who are forced to sell their
units pursuant to a condominium termination plan.
Before this amendment, bulk owners of more than 80% of the units in a
condominium could, subject to certain conditions, terminate the
The incentives for the bulk owner to terminate the condominium were
plentiful. Particularly after Florida’s 2008 real estate meltdown,
where institutional investors were able to bulk-buy units at depressed
prices and then were able to terminate condominiums and force buy-out
any remaining unit owners at the depressed “fair market value” which
was presumably only a fraction of the price the unit owners paid for
To add insult to injury, the unit owner would still be responsible for
any deficiency owed to the lender resulting from the forced sale of the
This amendment helps mitigate this issue by making it more difficult
and more expensive for the buyer assigned by the termination plan to
buy-out the condominium units from dissenting unit owners.
The new law requires the buyer to pay unit owners who purchased the
condominium unit from the developer, who object to the condominium
termination, and whose units have been granted homestead exemption
status, the greater of “fair market value” or the purchase price paid
for the condominium, subject to the unit owners being current with
their mortgages and association assessments.
In addition, if the condominium unit is a homestead property, the buyer
must also pay an additional 1% of the termination proceeds to the unit
owners. These changes undoubtedly help condominium unit owners who are
being forced out of their units against their will, and who are not
receiving at least what they paid for their unit in return.
Although this amendment was met with overwhelming support, its
potential negative impact, if any, will likely not be felt until the
next real estate down cycle. There is no question that a termination of
a condominium brought with it negative consequences to certain
condominium unit owners, but it also helped others, particularly those
in failing or failed condominiums.
This amendment may make it economically unfeasible for investors in a
down market to “rescue” failing condominiums because they will no
longer have the incentive of purchasing the condominium units at the
lower fair market value.
This creates a serious problem for unit owners in these types of
condominiums given that they may be subject to special assessments
depending on the state of their condominium or may be unable to sell
their condominium units at all, depending on the ratio of rental to
owned units in their building. Whether the advantages of this amendment
outweigh its disadvantages is a question that remains to be answered.
Amends condo statute 718, and provides that, in order to move forward
with a condo termination, at least 80% of unit owners must vote in
favor, and less than 5% of unit owners can object to the termination
proposal. If the termination is rejected by at least 5% of unit owners,
the association must wait 24 months before making another attempt at