Q&A: Condo rules will dictate profit division from sale
QUESTION: A family member of mine lives in an eight-unit condominium. A developer has offered to buy the building, and it was our expectation that the owners would split the money evenly because all the units are the same size. But some of the owners say they deserve a larger share because they've renovated their units. What does the law say about this?
ANSWER: As with most questions related to condominiums, the first step is to check the condo documents to see what they say on the subject. Deals to terminate the condo and sell to a developer generally must be approved by 80 or 90 percent of the owners. Also, any mortgage lenders that will not be paid off in full need to approve the transfer.
The method of calculating each unit's share may also be in the condo documents. If not, the owners will need to agree to share the money based on size of the units or fair market value. A simple solution might be to check with an appraiser to see how much a renovation increased the fair market value of a particular unit. Values typically are determined by location and size – so a renovation may not make much of a difference, leaving nothing for the owners to argue about.
ABOUT THE WRITER
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter @GarySingerLaw.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.
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