News About Properties

Bulk buyer’s condo coup busts small-time investors

In early 2008, with the real estate market well into meltdown, a deal to sell more than 100 condominium units in Royal Palm Beach was struck.

Considered one of South Florida’s first bulk condo buys, it was called “savvy” by market analysts and heralded as a sweetheart deal for Miami-based purchaser Kensington Trust LLC.

The high-priced flips that the trust subsequently made to individuals, sometimes for 75 percent more than it paid, was optimistically thought to be a sign of a real estate upturn.

Two years later, 70 percent of the units at the Kensington at Royal Palm Beach are in foreclosure or were recently repossessed by lenders.

Unit owners’ deaths raise many questions

Q:A senior-citizen couple purchased a unit in our 24-unit condominium in 2004 using a $213,000 mortgage and a very small down payment. In 2005, the husband died. In the period 2006 to 2008, the widow secured a total of $50,000 in home-equity loans (mortgages) on the unit. She died in May of this year. Sarasota County public records show about $170,000 in unpaid mortgages on a property worth about $130,000.

Her heirs came to the unit and cleaned it out to the bare walls. They appear to have walked away from this “underwater” mortgage situation. The July quarterly fee of $860 has not been paid. The bank may or may not even know of the owner’s death.

Do the heirs have any responsibility in this situation? Can they disclaim their inheritance? Should our condo board notify the bank? Should the board file a lien for unpaid fees? How many quarters of unpaid fees will the bank be responsible to pay in a foreclosure action? — A.O., Sarasota

After the craze: Condo conversions leave fractured communities

Michael Jacob was living at the Monterra apartments in Bonita Springs in 2006 when the wave of condo conversions came through.

Jacob, and everyone else in the 244-unit complex, was told by management to leave if they didn’t want to pay the sky-high price to buy – it was the very top of the wave to turn rental apartments into more lucrative condo sales.

Luckily for Jacobs, he and his wife didn’t buy their one-bedroom apartment for owner Tarragon Corp.’s asking price of about $200,000. Prices crashed almost immediately and Tarragon hastily canceled its plans even before the last tenants left.

“Poetic justice,” said Jacobs, who works as an assistant Lee County attorney. “It was just such an outrageous price.”

New state law might help reclaim fees [South Florida]

Many community associations throughout Broward have been struggling during the recession after foreclosed homes were left vacant and some financially strapped property owners quit paying their maintenance fees.

Now the state has stepped in to try to help; a new law allows both homeowner’s and condominium associations to deny nonpayers access to clubhouses, pools, fitness rooms and other shared community property. It also stipulates that foreclosing banks now will have to pay a year’s worth of unpaid maintenance bills or 1 percent of the original mortgage debt.

Even more controversial, the state allows associations to demand renters pay the community fees that their landlords aren’t paying, an attorney told a packed Pembroke Pines town hall meeting on Aug. 11.

Homeowner’s and condo associations now can directly bill renters for maintenance fees, with the property owner getting any rent money left over, said Lisa Magill, a partner in the law firm Becker & Poliakoff, which represents many community associations throughout South Florida.

Professional investors move into flipping foreclosed homes

Hoping there are big profits to be made in the aftermath of California’s housing collapse, professional investors are flocking to the business of buying foreclosed homes at distressed prices.

The investors, primarily private equity funds and groups of wealthy individuals, purchase the homes at public auctions, which are held daily on the steps of local courthouses. They refurbish the properties and try to sell them for quick profits.

Not long ago, the typical home flipper was an amateur tapping a home equity line or savings for an investment property. But professionals have rushed in, partly because of sparse investment opportunities elsewhere.

Pinnacle’s real estate fallout

When Pinnacle Financial Partners got started 10 years ago, the bank’s executives, who had survived many a past real estate collapse, pledged to focus lending on business and industry — not real estate development.

Now, the bank is beset by loan problems linked to real estate and homebuilding plans gone awry across Middle Tennessee, quite the opposite of its original goals.

This much seems clear: A series of acquisitions of suburban banks in the past few years shifted a larger concentration of the bank’s loans into real estate development in fast-growing areas around Nashville, leading to questions about how smart its bank purchases truly were.

The fallout has been severe.