Ritz-Carlton Sunny Isles largely wins in appellate ruling: views preserved
The Real Deal
By Mike Seemuth
18 November 2016
Rendering of Ritz-Carlton Sunny Isles Beach, with Edgardo Defortuna left and Manuel Grosskopf
In a case pitting the Tropicana Condominium Association against the
developers of the Ritz-Carlton Residences in Sunny Isles Beach, an
appellate court largely sided with the developers.
limit the reach of a state law that allows owners of 10 percent of the
units at a condominium to block termination of the building’s condo
The court ruled to limit the reach of a state law that allows owners of
10 percent of the units at a condominium to block termination of the
building’s condo ownership and a subsequent sale of the entire property.
The Third District Court of Appeals upheld most of a lower court ruling
against the owners’ association at the Tropicana Condominium in Sunny
The Tropicana Condominium Association had accused developers Edgardo
Defortuna and Manuel Grosskopf of blocking a sale of the nine-story
Tropicana to preserve the oceanfront view at Ritz-Carlton Residences
Sunny Isles Beach, a 52-story condominium the developers are building
next door. Grosskopf runs the real estate development firm Chateau
Group, and Defortuna is president of Fortune International Realty.
The association alleged in litigation in Miami-Dade Circuit Court that
Defortuna and Grosskopf used employees and other straw buyers to
acquire five of the 48 units at the Tropicana – or 10.4 percent of the
total number – to block efforts by the condominium association to
dissolve itself and sell the entire nine-story building to a developer
who could put a much taller building in its place.
But the Third District Court of Appeals on Wednesday upheld most of a
trial court ruling against the Tropicana Condominium Association in
August 2015. Tropical Condominium LLC, held by the owners of the five
units, filed suit in January 2015 against the association.
The Third DCA acknowledged in its ruling that “the association alleges
that the Tropical owners are associated with the developer of an
adjacent condominium tower, who does not favor a redevelopment of the
But the appellate court’s ruling centered more on flawed voting
procedures adopted by the Tropicana Condominium Association to
determine the process for terminating the association and condominium
ownership of the 48-unit building.
Under a statutory amendment enacted in Florida in 2007, 80 percent
voting approval is enough to terminate the condominium ownership of a
building unless owners of 10 percent or more of the units vote against
The owners of the five Tropicana units contended in their successful
circuit court suit that the association’s board of directors invalidly
adopted two amendments to the process of terminating Tropicana’s
condominium ownership structure.
Most unit owners approved the amendments – but not all of them did so,
as the Tropicana’s 1983 declaration of condominium requires for
enactment of such amendments.
The Third DCA ruled that the 2007 changes to the Florida statute don’t
apply retroactively to condominium declarations from prior to 2007
unless they contain certain language that incorporates amendments to
the state’s Condominium Act.
The appellate court said in its ruling that “when referencing Florida’s
Condominium Act, the declaration [for Tropicana] did not contain the
words ‘as amended from time to time.’ Absent this language in the
declaration, changes by the legislature to the Condominium Act
subsequent to the effective date of the declaration do not become part
of the declaration automatically.”
In its ruling in the Tropicana case, the appellate court said it upheld
the trial court’s finding that the legislature’s 2007 amendments to
Florida’s Condominium Act “could not be retroactively applied without
causing a constitutional impairment of contract.”
“The statute seemingly had language that suggested the intent was to
make it retroactive,” said law firm partner Helio De La Torre, who has
represented condo associations in similar cases centering on
termination of associations through votes by unit owners. He is a
partner of Coral Gables-based Siegfried, Rivera, Hyman, Lerner, De La
Torre, Mars & Sobel, P.A.
Ruling can hurt owners
“We had communities where bulk purchasers were coming with 80 percent
[of the units] and terminating,” he told The Real Deal, “and the only
chance we had to fight them was to make the argument that it shouldn’t
have been approved with 80 percent, that we had more than 10 percent
opposed. So, under the new statute we could fight them.”
But De La Torre said the ruling in the Tropicana case made that
argument less potent: “Now, this court knocks out that argument.”
The Third District Court of Appeal sided with the Tropicana Condominium
Association on one issue, in declining to uphold the lower court’s
finding that the association’s limit of two or fewer condo units per
owner is unreasonable.
Many Tropicana condo owners, including a large number or retirees,
believe the combined sales of their individual units would be less than
the price a developer would pay for the Tropicana’s oceanfront location
at 15645 Collins Avenue, and developers have made offers up to $100
million, the Tropicana Condominium Association claimed in the suit it
filed in Circuit court.
Chateau Group, run by Grosskopf, offered less than $50 million for the
Tropicana property, Michael Waldman, an attorney for the Tropicana
Condominium Association, told TRD last year. “They were told, ‘No.’ And
there was a discussion with Defortuna, but it didn’t go anywhere,” he