Condominium Termination in Florida
What Illinois calls a deconversion, Florida law calls a termination: the owner-approved sale of an entire condominium property to a single buyer under a plan of termination, closed in one transaction.
For many Florida associations the math has shifted: statutory inspection and reserve requirements have raised the real cost of keeping an aging building as a condominium, while investor demand for rental housing keeps the building's value as a single rental asset high. A termination lets owners capture that value together instead of absorbing rising assessments separately.
It is a board-led, owner-approved process with defined statutory steps. BV advises associations through all of it: valuation, owner education, the plan of termination alongside counsel, and the transaction itself.
Four phases, board-led throughout
Evaluation
- Professional valuation of the property as a multifamily rental asset
- Analysis of the premium potential over individual unit sales
- Initial presentation to the board
Education
- Owner forums to address questions directly
- Clear documentation for owners and the board
- Preparation of the plan of termination with counsel
Marketing
- Presentation to pre-qualified investors
- Strategic property tours
- Competitive bidding process
Vote & transaction
- Owner vote on the plan of termination
- Buyer due diligence, documentation, and closing
- Payment distribution, with leaseback options
Three ways Florida distributes the proceeds
Florida condominium law permits three allocation methods. Which one applies is set out in the plan of termination, and it materially affects what each unit receives.
Percentage ownership
Proceeds allocated by the ownership percentages stated in the association’s governing documents.
Appraisal of all units
Every unit is independently appraised, and proceeds follow the appraised values.
County-appraiser market value
Allocation based on the market values shown on the county property appraiser’s records.
The allocation method, the approval threshold, and owner objection rights are matters of the Florida Condominium Act and your governing documents. Review the plan of termination with a Florida termination attorney before relying on any figure here.
What owners and boards ask
The questions below come up at nearly every owner forum. Bring the rest to us; owner education is a formal phase of the process, not an afterthought.
How is the purchase price of my unit calculated?
Florida condominium law allows termination proceeds to be distributed by three methods: by the ownership percentages in the governing documents, by an appraisal of all units, or by the market values on the county property appraiser’s site. The method used is set out in the plan of termination.
How many votes are required from the owners to approve a sale?
The Florida Condominium Act sets a threshold of 80% of owners who must approve the plan of termination, and your association’s governing documents may impose their own requirements. Review your declaration and bylaws with a termination attorney; the interplay between the statute and the documents is building-specific.
Will the buyer buy units in bulk (less than 100% of the units)?
Typically, no. Developers don’t approach individual owners with unit-specific offers; they make an offer on the property as a whole. In the majority of cases, terminations are bulk sales that happen in one transaction.
How does the board move forward with a listing agreement?
Listing agreements are approved by a majority of the board at an open board meeting. We recommend the association consult a termination attorney regarding its specific requirements.
What happens to our reserves?
Funds held in reserve are distributed back to individual owners based on their percentage of ownership and the method by which they were paid into the reserve account.
Will renovations or capital expenditures be required before the sale?
No. Buyer offers are based on the as-is condition of the property, and the buyer is responsible for any deferred maintenance after the closing date.
How long does a termination take?
Termination sales generally average 12 to 15 months from listing to close, with clear milestones along the way: marketing, buyer tours, buyer selection, the owner vote, buyer due diligence, and closing paperwork.
Do owners get compensated for recent improvements?
In most cases, buyers allocate a percentage of the purchase price to upgraded-unit credits. If a unit qualifies, the credit is paid in addition to the baseline purchase price for that unit.
How do association loans or special assessments get paid?
The association loan is paid off from the sale proceeds. Owners pay off their special assessment balances to the association at closing. After the association winds down, 60 to 90 days after closing, any money remaining in the association account is disbursed to owners based on their ownership percentages.
Do we all have to move?
No. Buyers are generally willing to lease units back to owners on short- or longer-term leases. Each owner chooses at closing whether to lease back or move out. Typical terms run up to a year at a rate at or below what the unit would otherwise rent for, and special situations are typically accommodated.
Why associations say yes
Financial
- Premium pricing over individual unit sales
- Lower transaction costs: one sale, not dozens
- No renovation expense: the property sells as-is
- Reserves distributed back to owners
- Upgrade credits for recent unit improvements
Flexibility
- Stay in place: lease back your unit at or below market
- Existing tenant leases honored and transferred
- A path out of negative equity for underwater owners
- Clean exit: no future special assessments
- Special situations accommodated
Process
- Professional handling of every transaction detail
- No individual marketing, showings, or negotiations
- Collective leverage individual sellers don’t have
- A standard timeline with clear milestones
- Board-led decisions through established governance
Start with the valuation.
A professional valuation of the building as a rental asset, before any vote and at no obligation. If the premium isn't there, we'll tell you.
1 Ranges reflect the experience of BV's advisory team across closed bulk condominium sales, including transactions completed at prior firms. Outcomes depend on the property, the market, and the terms of each sale; past results do not guarantee future performance. 2 Approval thresholds, objection rights, and proceeds allocation are governed by the Florida Condominium Act and each association's governing documents, and Florida condominium law has changed materially in recent years, including inspection and reserve requirements. Nothing on this page is legal or tax advice; associations should engage a Florida termination attorney and their own tax advisors.