TALLAHASSEE, Fla. – April 12, 2012 – In most cases, people who purchase condominium units from bulk buyers won’t be able to sue them if there are construction defects or other problems.
Florida Gov. Rick Scott last week signed a bill that extended the protections for investment groups that have bought multiple units in a building. That means the investors don’t have any more responsibility than other buyers in the building.
The measure went into effect July 1, 2010, and Scott extended it for three more years until July 2015.
The exemption for bulk buyers boosted sales of distressed condos, helping the housing market recover, proponents say. Critics insist the measure isn’t consumer-friendly and shouldn’t become law permanently.
Florida law used to consider a developer anyone who bought more than seven units in a building of 70 units or more. Those buyers were forced to assume the same legal and financial risks as developers who build condos.
The bill eliminated the title of developer for bulk buyers, giving investment groups more incentive to make deals for deeply discounted units.
While investors scooped up South Florida condos, “a lot of other areas in Florida are having problems in terms of absorbing unsold units,” said Marty Schwartz, a Miami lawyer and a co-sponsor of the bill.
Some investor groups have proposed making the bill’s protections permanent.
“I still think there’s a need for it, but only for a limited period of time,” said Donna DiMaggio Berger, a Broward County lawyer who represents condo associations statewide. “Why would we want to make it permanent when the (housing) market is no longer distressed?”
From late 2008 until September 2011, investor groups made more than 100 bulk deals for condos in Palm Beach, Broward and Miami-Dade counties, according to CondoVultures.com, a Bal Harbour-based consulting firm. The total dollar value was nearly $3 billion.
Copyright © 2012 the Sun Sentinel (Fort Lauderdale, Fla.), Paul Owers, Sun Sentinel, Fort Lauderdale, Fla. Distributed by MCT Information Services.