An extension of the Distressed Condominium Relief Act has been approved by the legislature and is under review by Governor Rick Scott. Many were worried that the sunset of the Distressed Condominium Relief Act would prevent owners who bought distressed properties from reselling these properties in bulk. The act affords bulk purchasers of distressed properties protection from developer liability which might not be available to future purchasers upon the sunset of the statute. The unavailability of such protection may chill resales. The extension of the Act will keep the market liquid for future sales.
The Distressed Condominium Relief Act, adopted as Part VII to the Condominium Act, was enacted in 2010 as a way to promote the absorption of a substantial unsold condominium inventory arising from the downturn in the real estate market starting in 2008. It offered bulk purchasers of condominium units in unsuccessful condominium projects a shield against developer liability in order to encourage the purchase of unsold units. Originally enacted for a 2 year term, Part VII was later extended for 3 years to 2015. It was generally credited with assisting in the absorption of a substantial amount of the unsold condominium inventory.
In the legislative session just concluded on May 2, 2014, two bills enacted by the Legislature, SB 440 and HB 807, both carried a one year extension of Part VII and the protection afforded to bulk purchasers. Both bills are subject to approval by Governor Scott.