Termination of a condominium in Florida is a complicated transaction with numerous legal issues at play. F.S 718.117 governs terminations of condominiums and allows termination for economic waste or impossibility or for optional termination. In either scenario, at least 80% of the unit owners must approve the plan for it to become effective and 5% or more of the unit owners can reject the plan. However, not every declaration of condominium in Florida will incorporate F.S. 718.117 unless it contains Kaufman language so as to incorporate future amendments to the Florida Condominium Act (“as amended from time to time”). When a declaration does not contain Kaufman language and was recorded prior to 2007, the Association must proceed pursuant to the termination provision contained in the declaration. Many associations have previously worked around this impediment by simply amending the declaration to lower the threshold for unit owner approval of a plan of termination.
In the recent case of Avila v. Biscayne 21 Condominium, the termination provision in the declaration originally required the approval of all unit owners to terminate the condominium. The association sought to terminate the condominium by first amending the termination provision. The amendment lowered the approval threshold for termination to 80% of the unit owners. A minority group of unit owners did not consent to the plan of termination. The Third District Court of Appeal ruled that the change to the voting threshold materially altered unit owners’ voting rights and that the original termination provision requiring unanimous approval of all unit owners “gave every unit owner an effective veto over any termination plan…” The Court reasoned that the declaration of Biscayne 21 Condominium did not contain Kaufman language and that the provisions of F.S. 718.117 (which were passed after the recording of the declaration) did not apply.
If you serve on the board of an aging condominium building that may need to terminate due to economic conditions, you should consult with an attorney with experience in handling these complex transactions.
