Buyouts of aging South Florida condos are becoming common, but a recent Miami case offers a cautionary tale. The Biscayne 21 buyout in Edgewater took four years, multiple lawsuits, and $50 million to settle, raising questions about the fairness of bulk unit acquisitions. The 23-story Biscayne 21 building, completed in 1964, has sat empty since the settlement. Two Roads Development acquired the majority of units in 2022 for $150 million, aiming to build the 55-story Edition Residences. However, a group of ten holdout unit owners sued the developer, claiming the association’s governing documents were illegally amended to lower the termination threshold from 100 percent to 80 percent. They also alleged their neighbors were manipulated, bullied, and pressured to sell.
A four-year legal battle
The legal conflict hinged on the procedural validity of the termination process. The holdout unit owners, represented by attorneys Taylor Collins and Reid Boren, argued that the developer circumvented standard protections by changing the voting thresholds in the building’s bylaws. They alleged that the vote to amend the documents was not conducted fairly, effectively disenfranchising a minority of owners who wished to remain in their homes.
Two Roads stated it followed proper protocols and worked closely with residents. The case moved through the courts: a trial court initially ruled in favor of the developer, but an appeals court overturned that decision. Neither the appeals court nor the Florida Supreme Court granted rehearings, leaving the firm without legal options. In August, Two Roads and the holdouts settled for $50 million.
Costs and consequences
While the settlement allows construction to proceed, it comes at a high price. The dispute delayed the project significantly, and buyers of the Edition condos sued Two Roads this year, seeking refunds on their deposits. For the holdout unit owners, the process was grueling. Robert Murphy, one of the holdouts and an attorney, said the conflict could have been avoided. In 2021, he asked for a third more than the $1.3 million offer, but Two Roads declined to respond.
The winding down of Biscayne 21 highlights a growing trend. Following the Surfside collapse in 2021, stricter safety regulations forced costly repairs on aging waterfront buildings, making them prime targets for developers. Unit owners often face a difficult choice: accept an offer or fight a prolonged legal battle. While the current blueprint for these transactions is expensive and contentious, Florida lawmakers have yet to establish clear protections.
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Looking ahead
Living in one of South Florida’s many aging, waterfront condo buildings comes with a nagging feeling: What if a developer closes on a bulk unit buyout, with plans to redevelop the site? In some cases, it may be a blessing. Facing skyrocketing assessments due to stricter structural and electrical safety requirements imposed after the deadly Surfside collapse, homeowners can find a way out by selling their unit to a developer. But for many, it’s an ordeal.
It means going through a termination of the condo governing structure and numerous back-and-forths over per unit offers with the buying developer –– plus put pressure on them to decide if they’re willing to part with the homes they’ve tended to and invested in over the years. The holdouts and Two Roads agree on one thing: Florida lawmakers have to finally weigh in on bulk condo buyouts. Unit owners are calling for more protections for others targeted by developers, while Two Roads argues more clarity is needed on the process.
For years, condo owners across South Florida have been receiving offers by developers, but buyout offers skyrocketed after the deadly Surfside collapse in 2021 that led to stricter structural safety regulations, necessitating costly repairs. They are primarily targeting aging, waterfront buildings, which coincidentally face some of the most stringent repair mandates. Perhaps lawmakers do need to weigh in. But history shows that’s not as simple.
Since imposing stricter condo safety regulations, lawmakers have had to tweak these laws in subsequent years to address unforeseen problems from the initial legislation. Such was the case too with other major real estate items passed in recent years: Lawmakers also have gone back to tweak new laws on the Live Local Act and condo-hotels governance. Biscayne 21’s unwinding took four years, multiple courts and $50 million to resolve. If that’s the blueprint for condo terminations, then Florida probably does need a new guidepost.
