Article Courtesy of The Florida Record
By Rebecca Campbell
Published January 17, 2017
MIAMI — The 3rd District Court of Appeal recently sided
with minority owners by ruling that Florida’s statute law governing the sale
of condominium projects does not apply to properties that predate Florida’s
2007 amendment to its condominium statute.
The Daily Business Review reported on Nov. 22 that this news affects many
associations in particular The Tropicana Condominium Association Inc., a
Sunny Isles Beach group, which is fighting a minority of owners over a
blocked sale located in Florida's expensive Miami-Dade.
According to the report, the Tropicana Condominium Association sought to get
its members to approve a sale in order for developers to purchase the
buildings to replace them with modern high-rises. It is alleged, though,
that a small group of Tropicana owners were accused of being straw buyers,
thus preventing any potential future sales.
In Tropicana’s amended legislation, 80 percent is required for the approval
of a sale; however, the appeals court sided with the minority owners who
argued that in the property’s bylaws unanimous approval is needed. The
appeals court found that because the Tropicana’s 1983 governing documents
predate the legislative amendment and require all owners to approve the
sale, the small number of owners refusing to sell was enough to block a
According to the Independent American Communities, a website dedicated to
exposing residential real-estate corruption and educating consumers, this
interpretation of the Florida statute works to the advantage of real-estate
developers, who in this instance were the owners of the Ritz-Carlton, future
neighbors to the Tropicana.
The Tropicana association made the accusation that the straw buyers were
arranged by Ritz-Carlton who were able to acquire up to five of Tropicana’s
48 units, which was enough to meet the 10 percent threshold for blocking
future sales. The Tropicana association is reported to have accused the
property developers of resorting to covert measures to gain control.
The association alleged that the Ritz-Carlton undertook these steps to
ensure that potential rival investors didn’t purchase the Tropicana to then
demolish it before developing a bigger building that would subsequently
block any views from the Ritz-Carlton.
During the case the Tropicana Condominium Association turned its attention
to the court’s understanding of Florida law focusing on the sale of entire
condominium projects. According to the amendment the sale of a whole
property is permitted with 80 percent of owners agreeing and not more than
10 percent disagreeing.
However, while the Tropicana argued that this applies to all condominium’s,
the appeals court found that it only applied to condos that had been built
after July 1, 2007. As such, it didn’t apply to the Tropicana.
Additionally, the appeals court stated that Tropicana needed to update its
bylaws or use what is known as “Kaufman language” to ensure that the
property’s rules automatically update to reflect any future changes to the
Declaration of Covenants and Restrictions put forth by Association Governed
RULING 3rd DCA TROPICANA