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Reports on Building for Sale Signal New Era for Condominium Terminations

Siegfried Rivera
January 21, 2025

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The firm’s latest Miami Herald “Real Estate Counselor” column was authored by Lindsey Thurswell Lehr and appeared in Sunday’s edition of the newspaper. The article, which is titled “Reports on Building for Sale Signal New Era for Condominium Terminations,” focuses on recent reports of a small building in Fort Lauderdale that is undergoing a condominium termination to facilitate the buyout of all of the residences in order to make way for a new development at the site. The article reads:

. . . Reporting by the Sun Sentinel in October 2024 and earlier this month, which were followed by recent stories from three local television stations, paint a completely different picture of condominium terminations from that of past media coverage.

The newspaper’s latest article chronicles how the owners of the 18-unit Springbrook Gardens condominium on the intracoastal waterway in Fort Lauderdale got an unexpected wakeup call last September when they were told they had 48 hours to vacate the building. The evacuation order from the city’s building department was issued after the association’s engineer found the foundation of the four-story building, which was originally built as a hospital in 1947, had deteriorated to the point that the structure was no longer safe.  A second engineer hired by the association also concluded emergency repairs were an immediate necessity, and residents were subsequently allowed to move back in five days later after agreeing to initiate a structural shoring plan.

The newspaper’s latest article chronicles how the condominium association’s president then began contacting contractors and receiving estimates of $4-$6 million for temporary repairs, with the long-term solution costing substantially more. After exploring and discussing their options, the unit owners began moving out again in early November, only this time it was voluntarily so they could put the entire building up for sale.

“We just don’t have the money,” said the association’s president. “It doesn’t make sense to put more money into the building.”

Since the evacuation order, he reports to have been in constant communication with his neighbors, and he characterizes the process of selling the entire building as highly challenging and complex. Another owner says it has been an emotional rollercoaster since the evacuation, and he expresses his relief that his neighbors ultimately recognized that selling the building was their only viable option.

Obtaining owner consensus apparently was not an easy task. The earlier article indicates the association’s governing documents require 100 percent owner approval for termination of the condominium, and in October they were not in unanimous agreement.

The difficult situation they were facing is certainly not unique, and some condominiums in the state are in such dire straits that a termination under the law for “economic waste and impossibility” comes into play. Unlike optional terminations, the law provides that such a termination may be approved by “the lowest percentage of voting interests necessary to amend the declaration,” which can be as low as two-thirds of the owners for some associations. These terminations can take place when the total estimated repairs exceed the combined fair market value of all the units, or if “it becomes impossible to operate or reconstruct a condominium to its prior physical configuration because of land use laws or regulations.”

It remains a question whether Springbrook Gardens would have qualified for such a termination had some owners not consented, and the answer would have probably been determined via a complex legal process. Given the rise in condo assessments and repair costs as a result of the new state mandates for structural inspections and repairs, Florida’s lawmakers should take note of such cases and bring added clarity to the criteria for terminations for economic waste so that distressed associations are afforded the protections intended for in the statute.

What is clear is that Springbrook Gardens’ voluntary termination that garnered a rare 100 percent consensus will provide all of its owners with their best possible exit strategy. In fact, given the property’s prime waterfront location just six blocks north of Las Olas Boulevard, they are very likely to receive strong offers from a number of developers, and the association president’s communications efforts should be commended. . .

Lindsey concludes her article by noting that with so many other Florida condominium communities now facing similar situations after the results of new engineering inspections and statutory requirements, there is no doubt that Springbrook’s termination and sale will represent a harbinger of things to come. She writes that while it is much easier to achieve 100 percent owner approval in buildings such as this one with only 18 units, the directors and owners at larger properties in similar states of affairs would be wise to take a page from the property’s playbook and embrace a new perspective on terminations as a potentially lucrative exit ramp.

Our firm salutes Lindsey for sharing her insights with the readers of the Miami Herald on the takeaways from the condominium termination and sale of Springbrook Gardens. We write about important matters for community associations in this blog and our Herald column, which appears every two weeks on Sundays, and we encourage association directors, members and property managers to click here and subscribe to our newsletter to receive our future articles.