Thursday, September 17, 2015

Central Florida Condo-Owning Couple Fall Victim To 370-Unit Complex's Conversion From HOA-To-Apartment Rentals; Forced To Sell For Half Of What They Paid, Leaving Them $70K Short Of Funds Needed To Pay Off Mortgage

In St. Petersburg, Florida, the Tampa Bay Times reports:
  • If someone forces you to sell your property, shouldn't they be required to give you at least as much as you paid for it? That's what Nadia and Tyson Le Monte thought when they learned they would have to sell their St. Petersburg condo — bought in 2006 for $254,900 — because the complex is being converted to rentals.

    The couple were stunned, therefore, when told they would get just $127,000. That is $70,000 less than what it would take to pay off the mortgage. Now Le Monte, a former Marine and government contractor in Iraq and Afghanistan, fears he may have to drop out of college and go back to work even though he is under treatment for post-traumatic stress disorder.

    Says his wife, a pharmacist at the Bay Pines VA Medical Center: "This is such an awful situation to be in.''

    The Le Montes are among the hundreds of Florida condo owners discovering that a new law designed to increase their rights in condo-to-apartment conversions won't help them nearly as much as they hoped.

    Signed by Gov. Rick Scott in July, the law as first envisioned would have guaranteed that all owners who bought from the original developer would be compensated for the full purchase price if the complex turned rental.

    But shortly before the Florida House voted on the measure, it was amended to provide full compensation only for owners with homestead exemptions. That was a blow for people who bought their condos as second homes or those like the Le Montes, who rented out their two-bedroom unit after moving to a bigger place when their family began to grow.

    Tallahassee lawyer Peter Dunbar, an expert on condo law, said the compromise was necessary to save the measure from defeat.

    "Our (state) Constitution says that homesteads are special and the Legislature can treat them specially,'' Dunbar said. "You can't make that same argument for a second-home owner or a flipper or a renter. You probably couldn't have solved 100 percent of the problems, so faced with the dilemma of losing it all, this was the best choice. Otherwise even the homestead folks would have lost (protection).''

    The Le Montes' condo is in Bay Isle Key, a 370-unit complex in north St. Petersburg near 1-275. It is one of hundreds of Florida condo developments that investors began eyeing for conversion to apartments as the foreclosure crisis created a soaring demand for rentals.

    But that was years after Nadia bought her condo, never realizing she could one day be forced to sell it at a huge loss.

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