Many community associations do not have an absolute right to approve or disapprove of prospective purchasers; but instead the governing documents give them a right of first refusal to assign a sales contract to another purchaser on the same terms and conditions. A lis pendens is a publicly recorded notice on real estate documenting a pending legal proceeding involving that particular piece of real estate.
In a case involving the Decoplage Condominium Association in Miami Beach – 100 Lincoln Road SB LLC v. Daxan 26 FL LLC – an Appellate Court ruling has cleared the way for a potential reversal of the commercial space sold by Walgreens for $28 million dollars in 2014. According to the lawsuit, the condominium association had a right of first refusal to buy the commercial condo owned by Walgreens, plus the right to match or exceed any offer on them. Walgreens asked the condo association to waive those rights so it could sell the property to 100 Lincoln RD SB. The association instead assigned those rights to Daxan 26 LLC. Daxan and the association told Walgreens they wanted to exercise their right of first refusal, but Walgreens refused and went ahead with the closing. As part of its lawsuit, Daxan filed a lis pendens on the property, which allegedly prevented 100 Lincoln RD SB from executing a new contract to sell the property for $43.5 million to another company and now that sale is legally held up. The Appellate Court found that a lis pendens was proper without any bond until the complaint is resolved.