Pinellas condo owners could be forced to sell at a loss

Article and Video Courtesy of NBC Channel 8 Tampa By Shannon Behnken Published September 2, 2013 Watch VIDEO Three years ago, Stephanie Vandenbroeke, a single mother of two, poured her life savings into a condominium at the Madison Oaks in Palm Harbor. She works two jobs and pays her mortgage. But now, a development group from Miami says she and 42 other families have to sell their homes - for tens of thousands less than they paid when they bought at the height of Florida's real estate market. The development group wants to terminate the condominium. "You just can't do this to Americans that have families and work hard," Vandenbroeke said. "It's just not right." This seems impossible, forcing people out of their homes, but this development group claims in documents that the law is on their side. No one representing this group returned phone calls for comment. Madison Oaks was converted from an apartment complex to a condominium during the real estate boom. But when the market tanked, the developer was left with more than 200 unsold units. A new company recently bought those condos and wants to turn the whole place back into an apartment complex. They point to a Florida statute that was supposed to help owners terminate a condo in extreme cases, like a hurricane. But attorney Joseph Gaynor, who represents Madison condo owners, says Florida law should protect these owners. "I don't believe it was ever the intent of the legislature to have somebody come in and by 207 out of 250 units and decide to terminate the rights of the other 40 people," Gaynor said. The statute is supposed to give condo owners a chance to fight back if a developer tries to take over. "If they vote to terminate, then there's a second part of that statute that says if 10 percent of the people object to the termination, the plan of liquidation doesn't go forward," Gaynor said. But Gaynor says the developer took over the condo board and voted to amend the condo documents to get rid of this 10 percent protection clause. What's happening at Madison Oaks should sound alarm bells for anyone who owns a condo that used to be a part of an apartment complex. During Florida's housing boom, more than 30,000 apartment units in Tampa Bay were converted to condos. Many of those conversions, like Madison Oaks, didn't sell out. Instead, developers ended up buying units in bulk at many of these complexes. Meanwhile, residents at Madison Oaks filed a legal objection to halt the process - for now. But Gaynor says he expects this battle will end up in court . Owner Karen Rehs says she'll fight for her home. "I made it to be me, and now they just want to take it back, and I'm not going to let it happen," said Gaynor. The board of directors of the Madison Oaks Condominium Association has sent this response to Newschannel 8. "The Board of Directors of the Madison Oaks Condominium Association is issuing this written statement in response to a request for comment from Channel 8 Tampa regarding the prospective termination of the Madison Oaks Condominium. On August 21, at a special meeting for units owners at Madison Oaks condominium held to consider the potential termination of the Madison Oaks condo, the required 80% + of unit owners voted in favor of the termination of the Madison Oaks condo and as a result the termination has been deemed approved by the owners. In that regard, the Board of Directors would like to make the following points regarding the implementation of that Plan of Termination: Madison Oaks is a failed condominium conversion of what was previously a rental community. The termination will return Madison Oaks to its pre-conversion status as a well appointed garden-style rental community. The Declaration of Condominium, pursuant to which all current unit owners purchased their condominium units, provides that an owner of 80% or more of the common elements can approve a termination of the condominium. The termination is being undertaken pursuant to this express provision of the Declaration of Condominium that all unit owners agreed to be bound by when they purchased their units. The Board of Directors is sensitive to the concerns of the unit owners that the appraisal process for their units be undertaken in an arms-length, transparent process. The Board of Directors understands that concern and for that reason the Termination Trustee under the Plan of Termination will be retaining an independent appraiser that has done no prior business with any of the parties involved in the termination. The appraiser will individually appraise each unit to insure that those unit owners who have made special upgrades to their units will have such work factored into their appraisals – the goal is to make the appraisals as accurate as possible in determining the fair market value of each of the condo units. Owners whose units will be sold at the fair market value as a result of the termination are being offered the opportunity to enter into leases that will allow them to remain residents at the property. The management company has been instructed to negotiate lease terms on an individual basis, taking into account the specific situation of each owner." Thank you for your inquiry. Respectfully yours, Board of Directors of the Madison Oaks Condominium Association