Can a developer take back my condo?

07/12/2014 12:00 AM

09/12/2014 4:01 PM

Q: In 2006 we purchased a condominium conversion. Our unit was only 25 of the remaining 250 units that were not sold. The bottom fell out of the real estate market shortly after our closing. The remaining 250 units were taken off the market and have been rented out by the owner-developer.

We have been advised by the management that we are no longer a condominium. The owner has contacted us about selling a unit back for a fraction of what we paid. We like where we live and have no intention of selling. How can a condominium no longer be considered a condominium and can we be forced to sell?

L.P., Hudson

A: Yes, the condominium can be terminated under certain circumstances. You and the other 24 owners really need legal guidance. I cannot help. It must be a decision between you and the 24 other units and the developer.

You’re caught in a terrible situation that may cause a loss of your equity value. Maybe you can work a deal with the developer to live rent free for a number of years — enough to cover your loss. You must negotiate and you need legal guidance. Do not try to solve your problem alone.

As an alternative, find out if the developer has other properties where you can make an exchange.

You also may have a tax situation and for that matter you would need to consult with a tax adviser.

Q: I have lived in a condominium for several years. It bothers me how long it takes to collect maintenance fees from some owners. Some owners do not pay for 18 to 24 months before they bring their balance due current. We’ve had some that walked away and left everyone hanging.

I’ve looked into small claims court and our county clerk’s office and obtained the information but the question that I cannot get an answer to is this: Do the condominium president and the board have the right to use small claims court to collect these maintenance fees?

What if the owner is out of state and his friends are using his unit? Who do we file against — the out-of-state owner or the resident? What happens if we win in small claims court and the owner does not pay?

P.H., Bonita Springs

A: To collect delinquent accounts, never use small claims court. There is no need to use that method. Your board has the strongest method of forcing collection at its fingertips: lien and foreclosure. Using an attorney to lien and foreclose, the legal fees would be paid by the delinquent owner, not the association.

Waiting as long as you have described to force the collection is bordering on malfeasance by the board. The board needs to engage an association attorney and establish a collection policy.

No delinquent account should sit for more than 60 days before action begins. In those 60 days the board should have sent collection letters demanding payment. At that point the matter should be turned over to the attorney with instructions to lien the unit. The attorney should then demand payment, which should include delinquent fees, legal cost, and late fees and/or interest. If the people do not pay within an additional 30 to 60 days (subject to the documents and the statutes) the board should instruct the attorney to begin foreclosure.

That process is a most powerful collection process. The board can take title to a delinquent owner’s property within a matter of weeks. If your board is not taking this action, vote them out and vote in those who will take proper collection procedures.

Q: I live in a subdivision that has an HOA. The board has not enforced the rules for the past 10 years and many of the rules have been broken, i.e. home colors, yards, fences, etc. Now they want to start enforcing the rules and forcing people to get approval for anything done to their homes. Can they do that after ten years of not enforcing the rules?

J.B., Miami

A: It is possible to reestablish the rules for future changes or conditions. It would be difficult if not impossible to go back and correct violations where no actions were taken. The board would almost have to take an inventory of homes with violations and they would be grandfathered for future enforcements.

It may be possible that when repairs or replacements are made to these violations that the board can force them to comply with current rules.

I would suggest that the board seek legal guidance in reestablishing the rules. I would also suggest that the board seek approval from the owners.

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