Florida Condo Owners Receive a Double Whammy
Combine the Florida Legislature’s property tax reform - and its relatively small impact on nonhomesteaders - with the condo termination law that will go into effect July 1 and there could be a perfect storm for some property owners who thought they were secure in their home on the waterfront.
These are the two potentially colliding factors:
- The proposed tax reform measure does not offer tax relief for part-time residents. That could discourage them from continuing to own second homes in the Sunshine State because their taxes will remain much higher than average.
- At the same time, under the condo law, many will likely receive potentially lucrative offers from developers who want to take over their property to tear down existing structures and replace them with more modern and expensive units on the same valuable property.
On its surface, the new condo law now waiting for Gov. Charlie Crist’s signature was designed to make it easy for Florida condominium boards to tear down their communities or make major repairs in the wake of extreme damage from a hurricane.
But the bill also contains a nondisaster set of clauses called “optional termination” that means even if a condominium’s underpinning documents require all owners to go along with a teardown, the new law retroactively changes that to 80 percent.
A similar bill last year was vetoed by Gov. Jeb Bush on grounds that it infringed on private property rights.
There is a softening of the measure that allows 10 percent of units to block a termination, but that means Florida mortgage loan holders resistant to termination would have to take an active role in preventing it, and that one owner just saying “No thanks” could no longer prevent a takeover.
Crist received the bill on June 13, just as the special session on property tax reform was reaching its crescendo. He has until June 28 to either sign the bill or veto it. If he does nothing, it becomes law anyway, starting just a few days later, on July 1.
The Herald-Tribune has made repeated requests to interview Crist regarding the condo bill, or to interview any staff member familiar with it, to no avail. Crist spokeswoman Suzette Roblejo said the governor had received only a handful of e-mails on the subject by last week.
In one way or another, the law would affect all 1.3 million condominiums in the Florida housing market, which, at the end of 2006, carried a value of roughly $274 billion.
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