Happy 20th birthday, TBO.com! Here is the logo at launch in 1994.
Wednesday, Sep 17, 2014

Condo owners plead for fix to forced apartment sales

By
Published:   |   Updated: August 28, 2014 at 08:45 AM

— Homeowners from across the state packed state Rep. Carl Zimmermann’s district office Wednesday to call on Gov. Rick Scott to fix a law they say is causing thousands of Floridians to lose their homes.

Zimmermann on Monday sent a letter to Scott asking him to use his power to stop developers from converting condominium complexes into apartments until state lawmakers address how current condominium owners are impacted in the process.

Zimmermann, a Democrat, said Wednesday there is bipartisan support for addressing the issue during the legislative session next spring, but that would be too late for many homeowners.

“Families all over Florida are having their homes taken from them, against their will, by private investor groups,” he said. “They are receiving letters declaring that their deeds are being turned over to investor groups, and no matter how hard they fight, they’re losing it all. They’re losing their money and even their good credit.”

Those gathered in his office had come from as far away as Palm Beach County. Many bought their condos during the real estate bubble a decade ago, when developers were rapidly converting apartment complexes into condominium buildings. They said their condos were homestead properties.

Now, they said, investors are buying condos in bulk and nabbing seats on boards of directors for condo associations, then obtaining 80 percent majorities on those boards, Zimmermann said. By a provision that passed in 2007, the 80 percent majority allows boards to vote to approve conversions. Prior to that, the vote had to be unanimous.

Individual condominium owners are then forced to turn over their deeds to the bulk owner, he said, who could potentially offer to buy it for less money than is owed on the mortgage.

Credit damage that can ensue means some cannot buy property for another two years, and instead have to rent.

Palm Harbor resident Stephanie Krasowski said that’s what’s happening to her and her neighbors at Madison Oaks, where she bought her condo in 2007.

“We’ve been completely violated,” she said. “Our private property rights have been violated, our personal rights have been violated. It’s been an exhausting year trying to stay above water and trying to fight back with everything we’ve got.”

She said she bought her condo for $169,000, putting down 20 percent and financing the balance. Her condo board was later taken over by a bulk owner, which she said offered to buy her condo for $82,000. Since she still owed the bank $130,000, she objected.

She and her neighbors are trying to resist the buyout.

“They are bullying our neighbors into short sales, bullying them into taking offers and signing non-disclosures,” she said. “It’s been detrimental to us personally.”

Next week, she thinks the board is going to approve an apartment conversion at a Sept. 5 meeting.

Zimmermann said he has been working on the issue for months, and even tried to file a bill that would have required bulk owners to pay individual owners 110 percent of the price they paid the property or 110 percent of its market value.

“They’re not even reluctant buyers, they don’t want to sell,” he said. “So somebody should make it worth their while.”

The law wasn’t even heard in committee, but the Legislature did agree to amend state law to reduce the frequency with which a board can attempt to vote for a conversion to twice a year.

Since then, he said, state lawmakers from both sides of the aisle appear to support a bill like the one he proposed last spring, including Sen. Jack Latvala, R-Clearwater, and Reps. Jamie Grant, R-Tampa, Janet Cruz, R-Tampa, and Dwight Dudley, D-St. Petersburg.

It is unclear whether the governor is going to act on Zimmermann’s letter, but Zimmermann said he hopes something happens quickly and without political motive, given that then-Gov. Charlie Crist, who is running again for governor against Scott, signed the 2007 bill into law.

“My concern about party politics is that some groups will hold off taking action because they want to use this as a campaign tool,” Zimmermann said. “But I say, if you’re going to do the right thing, do the right thing now so it will help.”

 

kbradshaw@tampatrib.com

(727) 215-7999

Twitter: @kbradshawTBO

Subscribe to The St. Petersburg Tribune

Comments