Owners face losing condos in Kissimmee
Mary Shanklin
Orlando Sentinel
30 May 2017

Polk County resident Laurel Harris and a handful of Legacy Grand condo owners — including a few full-time residents — have been put on notice by their association that the Kissimmee property is becoming a hotel.

The main reason the condo association at Legacy Grand is able to transition the condo property into a hotel, against the wishes of some owners, is that an ownership group holds more than 80 percent of the units and controls the association.

The “takeover,” as Harris and her attorney call it, is a new twist on something that has been happening in Florida for years: Investors bought apartments at the height of the real estate market and tried to sell them as condos. But the real estate market crashed and left the buildings largely empty. Throughout the state, investors who accumulated large shares of units have been able to pressure the few remaining owners into selling so they could control the entire property.

Legacy Grand filed plans with Osceola County in March to make the switch from condo to hotel within 60 days — a timeframe that just ended. Any hope for the owners to get paid rest with the courts as the property comes under one ownership group that has filed for bankruptcy, records show.

The bankruptcy will cover the entire property as it becomes a hotel. At that time, owners of the project may sell the hotel and unit owners would get a share of the sales proceeds, plans show.

“They have not offered anything for our unit,” said Harris, who bought the unit with her mother for $15,000 in 2013. They have rented it out and used it as an occasional vacation spot, but they recently emptied out the furnishings — including a 60-inch television in anticipation of being locked out.

The group that controls Legacy Grand, C.C. LLC, could not be reached for comment. Its registered agent, Safety Harbor lawyer Kent Runnells, would not clarify the legal path of the condo termination and bankruptcy.

In 2015, the state set to protect owners who resided full-time in condos by passing reforms that gave them more leverage in the sale negotiations and additional money to relocate. The reforms did not help some vacation-home owners, such as Harris at Legacy Grand. Even residents who lack the homestead exemption status needed to establish their condos as their homes.

“It shouldn’t make a difference whether you live there or not. If you don’t live there, you’re generating income for the state of Florida and then you’re not protected,” said Harris, an administrator at a construction company. “It’s sending a message that they don’t want your business here.”

One reason condo terminations have become popular is that investors gain the ability to buy out owners and manage the entire property, instead of just chunks of it. Investors have said conversions can better serve the complexes by giving them a sense of overall unity and direction.

Orlando attorney Justin Clark said several of his clients who own units there, including Harris, are being overpowered by an ownership group simply because it has amassed the overwhelming majority of units and rewrote condo rules to turn the property into a hotel.

“Just like the developers are being creative in their attempt to seize the property of my clients, I think the individual owners must be creative in their fight to save them,” he said.

Harris said she has been trying to get to the bottom of what — if anything — she and her mother could expect to get for their unit.

The property management group emailed her this month stating that the financial information she requested was unavailable.

Judicial Arbiter Gregory D. Hoffman cited the Legacy Grand ownership group in 2011 for co-mingling rental income and sales proceeds from the Legacy. He found that condo converters, including Celebration resident Ralph Kirkland and Lithia resident Ken Franklin Jr., had “engaged in deceptive practices, made material and misleading representations and omissions which were relied on by buyers” to convince them they were making a safe investment that would be rewarded with rental income. The arbiter awarded nine condo unit owners more than $3 million in damages, but a bankruptcy has delayed those payments, records show.

Kirkland said he sold his share in 2010, lost his money during the downturn and has been residing with his wife in one of the Legacy Grand units for years.

“There are people who, like me, live there. There are families there and renters,” he said. “And they are all going to get put out on the street.”

Franklin could not be reached for comment.

Records indicate Harris and owners of several dozen other units had until May 24 to remove their furnishings, appliances, decor and renters. The notice the ownership group sent in March stated: “all personal property belonging to any unit owner and not a part of the condominium shall be removed from the unit(s).”

Harris said Thursday the door locks do not seem to have been changed yet but the association is positioned to take over since it submitted plans months ago.

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