Court ruling worries developers eyeing older Florida condos: NPR

Three years after a Florida apartment building collapsed, killing 98 people, new regulations have sent the cost of living in apartments soaring. As costs rise, residents in many older buildings are selling to developers racing to replace them with new luxury high-rises.

In Miami’s Edgewater neighborhood, many old buildings have been torn down and replaced with new high-rise condos. But in a prime spot on the neighborhood’s waterfront, there’s an old building that’s now vacant.

“They’ve already taken out a lot of the windows and doors, if you can see it on the upper floors,” says Jacqueline Fraga, who owns one of the now-vacant units in the Biscayne 21 condominium complex. All but a few of the 192 apartments in the building have been purchased by a developer who wants to tear it down and build a bigger, more luxurious building in its place.

Fraga is part of a group of unit owners who sued the developer just before demolition began. The 13-story building, which overlooks the clear blue waters of Biscayne Bay and Miami Beach, has a stunning view. “Why do you think they want it so much?” Fraga laughs.

Jacqueline Fraga is one of ten unit owners who refused to sell their condominiums to Two Roads Developments.

Greg Allen, NPR

Hide caption

toggle caption

Greg Allen, NPR

See also  Dow Jones and S&P 500 hit record highs; 5 New Buys in Stock Picker Market

Over the past two decades, waves of condo construction have reshaped Miami. The once-dormant urban center is now teeming with apartment buildings, thriving restaurants and shopping complexes. With most waterfront locations completed, developers are targeting older buildings, especially those in prime locations.

Fraga says she started getting calls several years ago from real estate agents asking if she wanted to sell her home. Her answer, she says, was always the same. “I’m not interested in selling. I said, ‘I came to this building in my wedding dress and I’m going to retire to this building.’”

Under pressure from real estate agents, other owners have sold. Company, Developing two roads Ultimately, the company acquired all but ten units in the building. It also took over the board of directors of the condo association, voted to change its governing documents, and authorized the building’s demolition, allowing it to be demolished.

Many older condominiums in Florida, including Biscayne 21, require 100 percent consent from the building’s unit owners to terminate the lease. By lowering that requirement to 80 percent, the Florida Court of Appeals ruled that the developer violated the unit owners’ voting rights and that the termination was illegal.

It’s a ruling that has far-reaching implications for developers looking to reclaim older condos for new projects. “From my client’s perspective, as well as other developers across Florida, they really step back and evaluate whether or not they’re going to continue redeveloping properties when these old, sick condos come their way,” said attorney Susan Ravanello, who represents Two Roads Development.

Regulations passed in Florida after the 2021 collapse of the Champlain Tower apartment building have helped bolster developers’ efforts to buy up and replace older apartment buildings. New rules These changes have increased costs for residents in many older buildings, sometimes requiring large special assessments that may not be affordable.

That wasn’t the case at Biscayne 21, built in 1964, said Glenn Waldman, an attorney representing Fraga and other unit owners. “This is not one of those buildings, even though it’s an old building, that had life safety issues. It’s a solid, sound building. It passed all the required tests and it would have continued to do so.”

The developer’s lawyers are asking the appeals court to reconsider the case and plan to take it to the state Supreme Court if necessary. If the ruling stands, it would make it much harder to replace the old apartment buildings, Ravanello says. “It gives one person control over the entire community,” she says. “That’s not something any developer wants to get into.”

Regulating condominiums is an issue Florida lawmakers have wrestled with before and is likely to come up again in next year’s legislative session. Republican Rep. Vicki Lopez, whose district includes Biscayne’s 21st District, believes the state should make it easier for developers to replace old condos.

She says she has 667 housing associations in her area, and she understands the dilemma many homeowners face as costs rise. “If you’ve been in a building for a long time, and you happen to live in a building on a nice plot of land, you don’t want to leave,” she says. “But the building is 60 years old, and we’ve reached a point now where the question is, is it even possible to afford to live in a condo anymore?”

The Biscayne 21 case casts further doubt on Florida’s condo market, where three-quarters of the buildings are more than 30 years old. Concerns about new state rules and the rising cost of living in condos have slowed sales statewide and even led to lower property prices. big drop in prices.