If you lived in a waterfront condo and a developer offered you fair market value for your unit – and everyone else in the building – what would you do?
There are condo owners who are being faced with this possibility; some of them are even anticipating the inevitability of making life-changing decisions.
Because of the collapse of the Champlain Towers South in Surfside, Florida in June 2021, there has been sweeping condo reform. In 2024, the Florida Legislature passed a bill introducing regulations on how buildings are maintained and how condominium associations are governed. This has resulted in costly assessments for the oldest structures in the state, particularly in associations that have continually voted down costly improvements to buildings and upgrading safety features.
Associations are now required to fully fund reserves and to satisfy structural integrity requirements through periodic inspections with state-certified inspectors. This additional homeowner expense, combined with increases in insurance, cost of living and general maintenance, has made it extremely difficult for many communities, especially waterfront properties, to financially keep up.
Developers primarily on Florida’s east coast are continually searching for older condo buildings with older populations who may be open to bulk buyouts of all units. Based on condominium documents, either all owners or at the very least, a stated majority, need to agree.
All these years later, however, with many residents drowning in special assessments and doubling and tripling of fees, condo boards are looking for a way out. Older buildings and their residents are taking a proactive approach and employing seller representatives. Similar to listing your condo or single-family home with a real estate company to find you a qualified buyer, seller representatives position properties in the best way in the marketplace that would appeal to a developer and help them mitigate the risks attached to developing the property.
Working with condo boards and individual owners, they can explain how a bulk sale can yield more for owners than individual listings. In addition, they help guide owners through the process and get them comfortable with the transaction and reduce the anxiety of relocating for older residents who may have lived in the community for decades. On the other hand, some residents think they have hit a gold mine and become excited at the prospect of moving with a good bag of cash putting them in a better financial position.
Usually this is a win/win situation for all parties involved, however, not all aging properties will qualify for working with a seller’s representative representing a bulk sale. The property ideally is low-density with a two-story structure and of course on or close to the water with enough usable land for developers to reimagine the site. Finally, since most older waterfront properties are in the best locations, these bulk sales are the ones that developers are most interested in.
We’re starting to see a second wave of migration to south Florida on both coasts, the first being the COVID-19 migration. This time the taxes in the Northeast and possible political issues are driving companies to relocate to Florida, making older condos on prime property just right for developers, and gold mines for owners. This is good news for Florida and for some condo owners, even better news.
