Condo documents govern rebuilding

The language commonly provides that a condo can be dissolved if a certain percentage of the units are uninhabitable.

Published April 17, 2005

What would happen if a condominium were destroyed by a hurricane?

Every declaration of condominium includes language that addresses reconstruction, said Ellen Hirsch de Haan, a lawyer with the Largo office of Becker & Poliakoff, which specializes in condo law. Look at your documents: Usually you will find this right after the section dealing with insurance.

The language may vary from one set of documents to another, but typically it will provide that the condo can be dissolved if a certain percentage of the units are uninhabitable (75 percent is common), or if the damage is so substantial that a certain percentage of the insurance coverage becomes payable. Again, 75 percent is common.

In some cases, those conditions trigger a vote by the members about whether to rebuild. In other cases, those conditions are enough to dissolve the condo. The percentage of votes needed to rebuild or not to rebuild may vary: Some documents require 100 percent, some require 75 percent and some call for only a majority.

Older documents, de Haan said, are more likely to require higher percentages. More recent documents, written after Hurricane Andrew in 1992, call for smaller percentages.

If the decision is to dissolve the condo and not to rebuild, the property is sold and the proceeds distributed to the owners according to their percentage of ownership.

If the decision is to rebuild, that would be done with insurance money and assessments of the unit owners.

Florida lawyers have been watching these laws closely since Andrew. De Haan recalled that two condos west of Homestead Air Force Base, in the Naranja Lakes area, were wiped out. "The remaining owners were holding meetings on the concrete slabs," she recalled. Those were the first two condos to be terminated in Florida, she said.

The documents in those cases required that 75 percent of the membership had to vote not to rebuild, "but we couldn't find everybody." Unit owners had scattered; no one knew how to reach many of them. In that instance, the court stepped in and required a lower percentage of the vote not to rebuild and oversaw the sale of the property and distribution of funds.