Excerpted from Builder Online story.
According to the Tampa Bay Times, a law that was passed in 2007 designed to keep hurricane damaged properties from becoming derelict eyesores is having unforeseen consequences. The law amended condo regulations so that only 80% of unit owners, not 100%, needed to cede approval to make repairs or terminate a condo association.
Unlike other parts of Florida, the Tampa Bay area and its many condo communities escaped the hurricanes largely unscathed. But the 2008 housing crash caused thousands of condo owners to default on their mortgages. Canny investors began snapping up units at bargain prices, knowing that once they owned 80 percent they’d be in a position to convert the complex to rentals and force the remaining owners to sell.
Tallahassee attorney Peter Dunbar, an expert on condo law and a former member of the Florida House of Representatives, said the intent of the 2007 law was to ensure that hurricane-damaged condos didn’t become derelict eyesores. Then (investors) came along with the strict economic motive — ‘I can make it worth more to my pocketbook’ — and that has disrupted what the original concept was,” Dunbar said. “It’s unfortunate.”
Darron Kattan, managing director of Tampa’s Franklin Street brokerage, estimated that there still are 30 or so condominiums in the Tampa Bay area that could be ripe for conversion because so-called “bulk owners” own at least 50 percent of the units. “The two factors that would drive investors to buy bulk opportunities are location and do they think they can get to 80 percent owned at some point,” Kattan said.