Greenberg Traurig's Condo Trends Newsletter - March 2011

Greenberg Traurig's Condo Trends Newsletter - March 2011

March 2011

This is the first issue of Greenberg Traurig's Condo Trends, a newsletter focused on issues affecting condominium development, operations and regulatory issues.  If there are any specific topics you would like to see addressed in future issues, please let us know.

The Incredible Bulk: Has the bulk buyer bill lived up to the hype?

As you know, this past summer the Florida legislature adopted the Distressed Condo Relief Act to protect buyers who purchase more than seven units in a condominium from being defined as developers and inheriting certain "developer" liabilities. When the real estate market took a dive, distress buyers and lenders were hard pressed to jump into a pool of surviving developer liabilities. The press has credited the change in law for the spike in bulk purchases (though a building consensus that a pricing floor has been established may also be a significant factor).  

Will the momentum increase in 2011? Some say it will save the condominium market while others say it's plagued with ambiguity and a short shelf-life.  The Act, by its own terms, is due to sunset on July 1, 2012, so as written, bulk purchases closing after that date will receive no benefits. 

Stay tuned for more on this topic as a glitch bill is already in the works for the Act.

The Association's Arsenal of Remedies has Expanded - that may not be all good news for developers

Maintaining the quality of the condo while you're still selling inventory units can be a challenge, especially when associations are plagued with high delinquencies. As a result (and with a bit of irony), associations' problems are now, more than ever, developers' problems (as distinguished from problems that developers were typically blamed for).

With the recent law change, associations (even those that are developer controlled) are now empowered with the right to collect rent from tenants (rather than allowing it to go to a delinquent unit owner landlord), suspend certain use and voting rights of delinquent unit owners and remove from office non-paying directors. A word of caution, however - as a unit owner with assessment obligations, these consequences could be applied against developers, as well, if they get behind on assessments.

When is Enough, Enough? Whether the development was a success or failure, when can final distributions be made and the entity dissolved?

When can you make final distributions and dissolve your developing entity?  Before you distribute and dissolve, keep in mind that your creditors and liabilities have to be accounted for. And, yes, warranty claims, as specious as they can be, need to be included as a potential liability. For some of the potential ways a creditor can claw back distributions, see Section 726.110, F.S. on fraudulent transfers.

Calling all Condo Techies! Here are a few apps that might increase your work productivity (or decrease it, depending on which ones you use).

Scan me your business card... ScanBizCards is an app that helps you scan business cards directly onto your phone. Save time and paper! Find out more at www.scanbizcards.com/.

I should probably jot that down... Looking for an IPad app that allows you to handwrite notes onto your IPad? Try Penultimate - a popular and easy to use app.

Long to quote provisions from the Condo Act 24/7 (hopefully not)? Look for "FLCondo" in the app store and you can carry the entire Condo Act with you.

CONTACT INFORMATION

Greenberg Traurig, P.A. | 333 Avenue of the Americas | Miami, FL 33131
Phone: 305-579-0500 | www.gtlaw.com

Gary A. Saul, Esq.
Phone: 305-579-0846
Fax: 305-961-5846
saulg@gtlaw.com

Meredith L. Singer, Esq.
Phone: 305-579-0822
Fax: 305-961-5822

singerm@gtlaw.com

Staci J. Rutman, Esq.
Phone: 305-579-0787
Fax: 305-961-5787

rutmans@gtlaw.com

Sabrina E. Little, Esq.
Phone: 305-579-0656
Fax: 305-961-5656

littles@gtlaw.com

This Greenberg Traurig newsletter is issued for informational  purposes only and is not intended to be construed or used as general legal advice. Please contact the author(s) or your Greenberg Traurig contact if you have questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer's legal qualifications and experience. Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2011 Greenberg Traurig, LLP. All rights reserved.

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