As you know, this past summer the Florida legislature adopted the Distressed Condo Relief Act to protect buyers who purchase more than seven units in a condominium from being defined as developers and inheriting certain “developer” liabilities. When the real estate market took a dive, distress buyers and lenders were hard pressed to jump into a pool of surviving developer liabilities. The press has credited the change in law for the spike in bulk purchases (though a building consensus that a pricing floor has been established may also be a significant factor).
Will the momentum increase in 2011? Some say it will save the condominium market while others say it’s plagued with ambiguity and a short shelf-life. The Act, by its own terms, is due to sunset on July 1, 2012, so as written, bulk purchases closing after that date will receive no benefits.
Stay tuned for more on this topic as a glitch bill is already in the works for the Act.