MIAMI — The 3rd District Court of Appeal recently sided with
minority owners by ruling that Florida’s statute law governing the
sale of condominium projects does not apply to properties that
predate Florida’s 2007 amendment to its condominium statute.
Business Review reported on Nov. 22 that this news affects many
associations in particular The Tropicana Condominium Association
Inc., a Sunny Isles Beach group, which is fighting a minority of
owners over a blocked sale located in Florida's expensive Miami-Dade.
According to the report, the Tropicana Condominium Association
sought to get its members to approve a sale in order for developers
to purchase the buildings to replace them with modern high-rises. It
is alleged, though, that a small group of Tropicana owners were
accused of being straw buyers, thus preventing any potential future
In Tropicana’s amended legislation, 80 percent is required for
the approval of a sale; however, the appeals court sided with the
minority owners who argued that in the property’s bylaws unanimous
approval is needed. The appeals court found that because the
Tropicana’s 1983 governing documents predate the legislative
amendment and require all owners to approve the sale, the small
number of owners refusing to sell was enough to block a potential
According to the Independent
American Communities, a website dedicated to exposing residential
real-estate corruption and educating consumers, this interpretation
of the Florida statute works to the advantage of real-estate
developers, who in this instance were the owners of the Ritz-Carlton,
future neighbors to the Tropicana.
The Tropicana association made the accusation that the straw
buyers were arranged by Ritz-Carlton who were able to acquire up to
five of Tropicana’s 48 units, which was enough to meet the 10
percent threshold for blocking future sales. The Tropicana
association is reported to have accused the property developers of
resorting to covert measures to gain control.
The association alleged that the Ritz-Carlton undertook these
steps to ensure that potential rival investors didn’t purchase the
Tropicana to then demolish it before developing a bigger building
that would subsequently block any views from the Ritz-Carlton.
During the case the Tropicana Condominium Association turned its
attention to the court’s understanding of Florida law focusing on
the sale of entire condominium projects. According to the amendment
the sale of a whole property is permitted with 80 percent of owners
agreeing and not more than 10 percent disagreeing.
However, while the Tropicana argued that this applies to all
condominium’s, the appeals court found that it only applied to
condos that had been built after July 1, 2007. As such, it didn’t
apply to the Tropicana.
Additionally, the appeals court stated that Tropicana needed to
update its bylaws or use what is known as “Kaufman language” to
ensure that the property’s rules automatically update to reflect
any future changes to the Declaration of Covenants and Restrictions
by Association Governed Housing Communities.