New law could cause an influx of Bulk Buyers to Miami

This week, Florida Governor Charlie Christ signed a new law into effect that significantly changes current Florida condominium statutes and may give Bulk Buyers a leg up.

First things first: What qualifies an Investor as a Bulk Buyer?

Answer - Believe it or not, according to Regulators a Bulk Buyer is any investor who owns or leases out seven units or more.

Prior to the passing of this new law, the Distressed Condominium Relief Act, deemed Bulk Buyers with the same responsibilities of Developers such as construction warranties as well as other responsibilities in association control. This new provision which will go into effect July 1, 2010 has a limited two year time window but removes the responsibilities of the Developer on the Bulk Buyer.

"Condominum law defines a developer as anyone who creates a condo, but also creates or offers units for sale or lease in the ordinary course of business," says Mark Grant, a partner at Ruden McClosky law firm in Fort Lauderdale. He helped draft the Bulk Buyer provision. "With the new law, it is very clear that a bulk buyer does not fit into the definition of a developer --- they're exempt."

The Golan Team who have been involved with and following closely Bulk Sale purchases in Miami feel this is added bonus to Bulk Buyers who have been deliberating when to enter the market. "We have spoken with Buyers who were interested in making big purchases but were very worried about the potential liabilites or future liabilities that would fall on their shoulders if they were to burden the responsibility of the Developer" says Debra Golan, Managing Partner of The Golan Team, Keller Williams Realty. She continues, "Our Buyers were willing to pay for the units and manage the responsibility of holding, leasing and reselling of those units but did not want to be part of the running of the building or association." Another benefit to the new law is that Bulk Buyers no longer have to budget for possible litigation.

Two other major provisions of the new law include:

a) A provision that doubles the amount of condo assesments that Lenders will have to pay when they take title to in foreclosure, from six months to 12 months. Payments to condo associations have been one reason that some Banks have been relunctant to foreclose on condo units.

b) A provision that now Condo associations can suspend uses of common area facilities when owners fail to pay their assessments.