Real Estate Forum

NEWS FRONT
Distressed Condo Relief Act Extended to 2015

TALLAHASSEE, FL—Florida Gov. Rick Scott has signed into law a bill that extends the Distressed Condominium Relief Act. Known as HB 517, the law will remain in effect until July 1, 2015; it was due to expire this coming July.

Florida House Rep. Julio Robaina entered the Distressed Condo Relief Act into the House registry in 2009, and the law took effect in July 2010. It amended Florida condo law to protect bulk buyers and assignees from developer liability, while helping condo associations to collect what they’re owed.

Essentially, the way the state defined a developer has been changed in order to make it easier for bulk buyers to snap up condo inventory. Many investors wanted to buy in bulk and didn’t want to assume developer liability. The act makes that possible.

“The Distressed Condominium Act has
played a critical role in stimulating South
Florida’s real estate market, bringing buy-
ers off the sidelines to purchase units in
bulk and helping expedite absorption of
the surplus inventory,” says Marty Schwartz,
a partner in the real estate group at Bilzin
Sumberg and co-author of the bill. “The
extension of the Act will go a long way
toward promoting continued absorption in
Florida since prospective purchasers can
total condo sales in Downtown Miami
down approximately 5% from 2010 as of
year-end 2011, according to the study pre-
pared for the authority by Goodkin
Consulting and Focus Real Estate Advisors.
The average unit sales price in 2011 was

$370,003, representing a 6.4% increase from over 2010 and 22.4% increase over 2009. The average price per square foot in new inventory rose by 12.6% to $365. The average rent per square foot also rose 10% year-over-year to $1.78. —Jennifer LeClaire

The Ripple Effect of Foreign Capital
A market-defying 93%
of the 22,785 condo
units built since 2003
are now occupied
primarily with full-time
residents.

rely on the continued availability of the
Act’s protection for another three years.”
There is proof that the bill has worked,
at least in Miami. Downtown Miami is now
officially one of the most active residential
real estate markets in the nation. A market-
defying 93% of the 22,785 condo units built
since 2003 are now occupied primarily with
full-time residents, including both owners
and renters, according to an independent
Residential Closings & Occupancy study
commissioned by the Miami Downtown
Development Authority.

Meanwhile, shrinking inventory saw
Over the past few years, South Florida has been the recipient of a massive influx of for-
eign capital. It has been widely reported over the past year that foreign investors, primar-
ily from Spain and South and Central America, and almost always paying with cash, have
swept up the majority of vacant boom-time condominium units—according to the
Miami Downtown Development Authority, more than 93% are now sold. But the revival
of the residential condominium industry is only the tip of the iceberg—many recent
foreign investments are astonishing in their scope and diversity and stand to benefit the
region in a transformative, lasting fashion.

Albert E. Dotson, Jr. is a partner at Bilzin Sumberg and serves as its Land Use & Zoning and Government Relations Practice Group leader. Based in Miami, he may be contacted at adotson@bilzin.com. The views expressed here are the author’s own.