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Article
Courtesy of The Orlando Sentinel
By Mary
Shanklin
Published
June 22, 2015
Winter Springs condo owner Shirley Lofgren, 85,
expects to be forced out of her home under a Florida law that allows
developers to strip owners of their homes. The condominium termination
law, as its called, lets developers take title to condos when only 20
percent of the units are in the hands of owners.
But Mission Club condo takeover likely unaffected by this law
reform.
Gov. Rick Scott this week signed a law aimed at protecting the rights of
condo owners when developers are trying to convert complexes into rental
properties.
The legislation is designed to restrict buyouts that enable companies
that own the bulk of the units in a condo complex to force remaining
owners to sell to them. The new law calls for bulk-ownership investors
to compensate individual owners for the amount paid in most instances.
State Rep. Chris Sprowls, R-Palm Harbor, who introduced the legislation,
said the main concession he made in getting the legislation approved was
restricting it to help only owner occupants who live in their condos
instead of investors and snowbirds who may use the condos as vacation
homes.
"We wanted to cover anyone whose ownership rights were terminated, but
we had to narrow it to the people who were homesteaded," Sprowls said.
"We needed to make sure that people who had these as primary residences
and didn't have anywhere else to go were covered."
The new law comes too late for Winter Springs resident Shirley Lofgren.
Earlier this year, Miami-based developers terminated the 85-year-old's
condo rights and offered her less than a third of the $217,000 she paid
for it in 2007. The undisclosed sales price has not been recorded;
Lofgren is renting the condo she had owned for years.
"It's unfortunate that the new law didn't help the thousands and
thousands of people who, well before there was any publicity about this,
got slaughtered by these buyers," said Lofgren's son-in-law, Robert
Mattis. "But it does help people in the future, and that's good."
Under the law signed Tuesday, Lofgren would have gotten back the
$217,000 she paid for the unit at the peak of the market.
A day before Scott signed the law, which took effect immediately,
developers of Mission Club condos in south Orange won approval to take
over the 350-unit condo complex.
Mission Club's bulk buyers said the timing was "just a coincidence," but
Sprowls said the New York-based ownership group ESG Kullen "absolutely
tried to rush it into effect."
Most owners in Mission Club will not benefit from the new legislative
protections, because it is not their primary residence; Orange County
records show just one homesteaded unit, and about two dozen owners have
Orlando mailing addresses. ESG Kullen began purchasing units there last
year. In May, ESG Kullen gained control of enough units to call for
Monday's termination vote.
ESG Kullen lobbied for changes in the newly approved condo-termination
laws. Company principal Eric Granowsky issued a statement about its
takeover of Mission Club: "Our intention is to work with every owner
respectfully and fairly through this process, following the course of
action agreed upon in the Mission Club Declaration of Condominium. We
believe the best result for all parties is that this project become a
rental community."
The new requirements call for investors to fully reimburse owner
occupants, except when second mortgages are outstanding. Sprowls said
the new rules could force investment groups to rethink their business
model — they may be less inclined to take on the condo-to-apartment
conversions in the future.
Since 2007, developers and investors have taken ownership of more than
11,000 condominiums throughout the state and forced individual unit
owners to sell their homes and vacation homes, state records show. That
law was designed to enable renovation of blighted condos in the wake of
falling values amid the Great Recession.
In Central Florida, Enders Place at Baldwin Park, Conway Forest,
Esplanade Condos, Harbor Beach, Summerlin at Winter Park and Harbor Bay
Retirement Village are among the condominium projects that have become
rental properties as demand for apartments has surged.
Pennsylvania resident Debra Erickson and her husband bought a unit at
Mission Club for $215,000 in 2008 with part of their retirement savings.
She said she expects the new ownership group to offer her a fraction of
what she paid. If she wants to challenge the offer, she will have to go
through an appeals process.
Erickson said she's not only disappointed that she's likely to lose much
of her original investment, she also said the reform laws will only
discourage buyers like herself from purchasing Florida condos as second
homes.
"Honestly, the Sunshine State is not so sunny for those who put all of
their hard-earned money into a place they were going to call home and
then have it taken away by powerful and greedy investment companies,"
she said.
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