Are Floridians still being forced to sell their homes at huge losses?

TALLAHASSEE, Fla. — When the Florida legislature passed a new condominium law in the spring, Silviya Gregory thought she would be protected from investors who may want to turn her complex into apartments — at a devastating loss to the individual owners like her.

It hasn’t worked out that way.

Gregory falls under a loophole in the new law, and now she fears she may be required to sell her two-bedroom unit in Grande Oasis at Carrollwood at a low price — even if she is current on her mortgage and condo fees.

“A lot of people who thought they are protected by the new law are not,” said Gregory, a nurse who emigrated from Bulgaria in 2003. 

In February, State Sen. Jack Latvala and Rep. Chris Sprowls introduced a bill requiring investors who wanted to convert condo complexes to apartments to pay unit owners the fair market value or original purchase price, whichever is greater. Before, companies only had to pay the owners they were evicting the "current market value" for their units, which often didn’t even cover their mortgage. Some owners, who diligently paid their bills and fees, were left without a home and drowning in debt.

Investors did this using a loophole in Florida’s 2007 condominium termination law, originally designed to help developers salvage aging or storm-ravaged properties that would cost more to repair than they were worth.

Between 2007 and 2008, investors snapped up condos after Florida’s market crashed and used the law to force out condo owners through a process called termination. If an investor owns more than 80 percent of the condo unit – and fewer than 10 percent of the condo owners object – the investor, known as a bulk buyer, can terminate a condominium complex and convert it to apartments.

Across Florida, 15 condominium complexes – with 1,175 units – have been terminated by bulk buyers or developers this year, according to state records.The new law is meant to prevent buyers from profiting at the expense of individual condo owners when they buy the complexes. But an America Tonight investigation reveals that the law still contains loopholes that leave many individual owners vulnerable to investors.

The new law doesn’t outlaw termination, but Florida legislators said it would offer relief for individual condominium owners threatened by big investors.

“This legislation will ensure that bulk buyers are not able to artificially drive down property values and then fail to compensate condo owners for the purchase price of their units,” Latvala said in a press release announcing the legislation in February.

The bill sailed through both houses in April and was signed into law in June.

Even owners who bought their condos from the developer are vulnerable under the new law. Nadia Le Monte, bought her unit in the Bay Isle Key in St. Petersburg from the developer shortly before the market crashed in 2008.

After marrying, Le Monte and her husband moved to a home nearby, where they now live with their two young daughters, renting out their condo in the process. But the law only protects condo owners who use their condominium as their primary residence. Now, she may be forced to sell her condo for $70,000 less than she owes on it.

Like Gregory, Le Monte said she does not want to sell, but she fears the bulk buyer at Bay Isle Key will terminate her complex and convert it to apartments.

“Apparently, we have no say based on how the laws are written,” Le Monte said.

She has filed suit in Pinellas County, saying her rights under the state constitution have been violated. 

Questioned about the law recently as he headed to a committee meeting, Latvala said he hadn’t heard of any problems with the condo termination measure he co-authored. He defended the law’s focus on people using the condo as their primary residence, as opposed to owners using them as rental properties like Le Monte.

“We wanted to take care of people that had bought them as opposed to renters or people that had investment properties,” Latvala said. “So, we were trying to take care of them, the people that were using them as residences.”

But Le Monte isn’t renting out her condo as an investment, like bulk buyers do. She said if she is forced to sell at the current market value, she and her husband will be forced to sell their home and her husband, a former Marine, will be forced to quit college.

“This is a business deal to them. And that’s all that it is. It’s business,” Le Monte said. “So, it’s our lives, but to them, it’s business.”

Doreen Rosselli lives down the street from Gregory. She did buy her unit from the original developer and she uses it as her full-time residence, so the new law covers her. But between the passage of the legislation on April 27 and being signed into law on June 16 by Gov. Rick Scott, the investor-controlled condo association amended its declaration with the county.

The filing says Grande Oasis will follow the state law “as it exists on the date of recording this Amendment.” The date of the amendment is June 4, which was after the bill passed the legislature but before it became law. As a result, Rosselli said she stands to lose $130,000 if Grande Oasis is terminated, a potentially devastating financial blow.

“I might have to work longer than 65,” she said. “I’m almost 54 years old. Why should I have to start all over again? I think it’s rotten.”