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Condo projects raise some concerns

A state senator and city officials want to ensure consumers are protected.

Tim Barker
Sentinel Staff Writer

February 15, 2006

With more and more apartments being converted to condominiums, state and local leaders are worried that consumers may not have enough protection against shoddy workmanship.

"There are so many older buildings being converted that you have to be concerned," said state Sen. Gwen Margolis, D-Miami Beach.

Margolis has authored a bill calling for a study of Florida statutes to decide if more needs to be done. A recommendation would be due at the end of November if the measure passes.

Among the questions expected to be addressed: Is there enough financial accountability for developers? Are consumers being given adequate disclosures about the potential for costly structural or mechanical repairs? Should the role of government building inspectors be increased?

It's an issue that has attracted the attention of the city of Orlando, which is drafting its own recommendations. City officials say they haven't seen any major problems, but worry about the potential, as more older buildings are converted.

"Some of these buildings were frankly never built to last forever," Planning Director Dean Grandin said.

The danger for buyers is that they take on responsibility for maintaining a building once ownership passes from the developer. And while developers are required to provide a warranty, they typically use separate limited liability corporations to do the conversions -- limiting their exposure.

Current state law requires converters to notify the city or county that a conversion is taking place. But local government has no other role in the matter -- no inspections, or approvals are required.

"We're kind of stuck on the outside," Code Enforcement Director Mike Rhodes said.

Last year, Orlando led the nation in the number of apartments being converted to condos. More than 14,000 units were bought for conversion, more than triple the number in 2004, according to New York-based research firm Real Capital Analytics Inc.

The trend has put enormous pressure on rental rates, with fewer apartments available for renters.