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Terminating Condominiums According to the Florida Condominium Act: Part III
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Terminating Condominiums According to the Florida Condominium Act: Part III

April 17, 2014 Community Association Industry Legal Blog

Reading Time: 4 minutes

This is Part III in a series of Blog posts discussing the process for the termination of condominiums according to Section 718.117 of the Florida Condominium ActPart I of this series focused on the process for termination due to economic waste or impossibility to continue.  Part II discussed the optional termination process, which was added to the statutes in 2007.  This Blog post provides an overview of the plan of termination and the required provisions to be included in the plan according to the Florida Statutes.

First, the plan of termination must be in writing.  Fla. Stat. § 718.117(10).  Second, the written plan of termination must identify the termination trustee, including the name, address and affirmative powers of that trustee.  See Fla. Stat. § 718.117(13); Fla. Stat. § 718.117(10)(a).   Concerning the trustee, the most common scenario is that the association, as represented by the board of directors, shall serve as the termination trustee.  However, if the association is unwilling or fails in its duties to act as trustee, then any unit owner can petition the court to appoint a trustee.  Fla. Stat. § 718.117(13).  In addition to identifying the termination trustee, a written plan of termination must also include the following provisions:

  • The date after which the plan of termination is void if it is not recorded.
  • The interests of the unit owners in the association property, common surplus and other association assets, which must be the same as the unit owners’ interests in the common elements prior to the termination.
  • The interests in the unit owners in any proceeds from the sale of the condominium property.
  • If condominium property, or other real property owned by the association, is to be sold following the termination, the plan must provide for the sale and establish minimum sale terms.
  • The interest the unit owners have in any insurance proceeds or condemnation proceeds that are not used for repair or reconstruction at the time of termination.

Fla. Stat. § 718.117(10)(a)-(e).

If the termination of condominium is a partial termination, the plan must identify the units that survive and provide that such units remain in the condominium form of ownership pursuant to an amendment to the declaration of condominium.  Fla. Stat. § 718.117(11)(a).  Title to those surviving units, along with the common elements that remain part of the condominium property, must remain vested in ownership as reflected in the public records and such items of condominium property will not vest in the termination trustee.  Id.  As an optional provision, the plan may also provide that each unit owner retains the exclusive right of possession to the portion of the real estate that formerly constituted the unit, but the plan must specify the conditions of that possession.  Id.

It is possible for a plan of termination to be created ahead of time in anticipation of a future event that would require termination.  This scenario is referred to as a plan of conditional termination.  A situation where this may come into play is where a major zoning change is in the works and likely to pass, which would affect the condominium property.  As another example, a condominium along the Florida coast may wish to be proactive and create a plan of termination in the event of a natural disaster such as a hurricane or sinkhole.  Where the association wishes to plan for a conditional termination scenario, the written plan must specify the exact conditions for termination.  Fla. Stat. § 718.117(11)(b).  In a conditional plan, title to the condominium property does not vest in the termination trustee upon execution of the plan.  Rather, title only vests in the trustee when the plan, along with a certificate executed by the association confirming that the conditions have been satisfied, are recorded in the public records.  Id.  Stay tuned for Part IV of this series, which will discuss the steps that must be taken to properly execute the plan of termination and what must be done after the plan is executed and in effect.

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