Governor Scott vetoes “Bulk Owner” provisions in last legislative session.
By Perry C. Rohan, MBA, LCAM
Florida House Bill 653 was, among other things, intended to extend indefinitely the establishment of rights available to “Bulk Buyers” and “Bulk Assignees” of condominium units that fall under Florida Statute 718. Unfortunately, the bill in its final form did not make it past review with Governor Rick Scott, who vetoed the bill on June 26th, 2017
In 2010, the Florida Legislature passed the Distressed Condominium Relief Act (Act) in order to relieve developers, lenders, unit owners, and condominium associations from certain provisions of the Florida Condominium Act. The Act created categories of “bulk buyers” and “bulk assignees.”
A bulk assignee is a person who acquires more than seven condominium parcels as provided in a condominium community and receives an assignment of some or all of the rights of the original developer of that community. A bulk buyer is a person (or company) who acquires more than seven condominium parcels, does not receive an assignment of developer rights, but retains the right to conduct sales, leasing, and marketing activities within the condominium; is exempt from payment of working capital contributions and also be exempt from rights of first refusal of purchase.
The rights of Bulk Buyers and Bulk Assignees were particularly helpful to real estate investors seeking returns from distressed properties in condominium communities. The Florida Association of Realtors reports that in the 1st quarter of 2017, there were 1,568 “distressed condominium and townhome” transactions, where an estimated $180,320,000 in property value changed hands.
“My clients pay their association dues regularly and provide a valuable service to the tenants who rent their condominium properties”, says Uriel Uribe, Regional Director with FirstService Residential. Uriel’s Multi-Unit Owner Group provides property management services exclusively for bulk owners. He continues, “This bill would have been a tremendous help to our clients who, in many cases, have revitalized communities that were devastated by foreclosures and short sales.”
Because the Act in 2010 was created in reaction to the massive downturn in the condominium market which had previously occurred throughout the state, it was not intended to become a permanent law. In fact, there were various extensions granted beginning in July 2012, again in July 2014, and then again in July 2015 which extended rights through July 2018.
Bulk Buyers and Bulk Assignees must now wait for another bill to be passed or hope for another extension or rights to be granted beyond July 2018.
Perry C. Rohan is the Director of Business Development for FirstService Residential in the Central Florida Region. Perry can be reached by email at email@example.com