Florida Condominium Distressed Act
Florida condominium investment has been hot for quite some time, and investors – both foreign and American – have been investing right and left. Many have purchased Florida condominiums in bulk, and some investors have even purchased land to develop more condos. However, developments in the past few months may change how investors feel about Florida condominiums, because the bills that were designed to extend the Florida Distressed Condominium Act were not pushed through.
What is the Florida Distressed Condominium Act?
This act, enacted on July 1, 2010, enabled investors to buy Florida condos in bulk without the fear of certain liabilities. Most importantly, the act restricted certain developer liabilities that investors might have been saddled with from the original developer, making it much easier (and more attractive) to purchase condos in bulk for investment purposes. It also allowed the investor to maintain certain rights regarding the operations as well as the re-positioning of the assets.
The Bills Designed to Extend the Act
Set to expire on July 1 of this year, the Florida Distressed Condominium Act could have been extended by two bills set before lawmakers, including Florida House Bill 319 and Florida Senate Bill 680. These were designed to extend the act and keep it effective through the year 2015. Neither bill went through, meaning that the act was not extended. This could mean serious changes for those investors who have been quickly buying up distressed condominiums in Florida.
What Does This Mean for Investors?
If you’re sitting on a group of condos and thinking about buying them, the bottom line is that now is the time. After July of this year, the act will have no legal effect, meaning that you can be liable for those specific things mentioned above, such as the developer’s liabilities. This includes claims that originated with the condominium developer. If you plan to purchase bulk condos after July 1, 2012, you’ll need to speak with an attorney to ensure that your best interest is protected.
Overall, although the act is not extended, buying Florida condominiums as an investment is still a great idea. It’s just important to look at the bulk buying options and whether you’re prepared to take the risk on purchasing in bulk now that the act is no longer in effect.
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