Since changes in the termination statute in 2007 permitting optional terminations, several hundred condominiums have been terminated in Florida. Most of these were as a result of the Great Recession where many condominium conversions, from rental apartments to condominiums, were reverted to rentals by terminations. Although the great majority of these terminations were without incident, and in many cases resulted in improvements to the property, there were a few high profile and well publicized terminations in which the concept of termination became an anathema. In these cases, homeowners lost their homes and wound up with a bill from their lenders as a result of the deficiency between their proceeds from the termination and the amount of their mortgages. Efforts were made by changes in 2014 and 2015 to the termination statute (Section 718.117 of Florida Statutes) to address those unfortunate results.
Notwithstanding the lack of experience to determine whether the prior “fixes” were working, the 2017 legislative session enacted two bills, HB-653 and SB-1520, both having almost identical provisions, intended to tighten the screws against further termination of condominiums. HB-653 was recently vetoed by the governor but SB-1520 was signed into law as 2017-122 on June 19. There is no doubt that the legislature has succeeded in the goal of making terminations more difficult, if not almost impossible. Rather than seeking some additional surgical goal, as was previously provided, the Legislature appears to have adopted an almost nuclear option. Ignoring the beneficial effects of terminations in restoring Florida housing stock during a difficult period, the Legislature has trashed the bushel because of a few bad apples. This may be the equivalent to eliminating the federal food stamp program because of some notorious cheaters.
