Condominium Development, Financing and Conversion
- Holland & Knight has extensive experience counseling clients in matters involving fee and leasehold condominiums, cooperatives, homeowner and property owner associations (residential, commercial, hospitality and mixed use), including formation, development, conversions, acquisitions, restructurings, terminations, sales, sale-leasebacks, registrations, permitting, tax matters, marketing, due diligence and financing, as well as in establishing effective operational structures.
- Our Condominium Development, Financing and Conversion Team's suite of services includes structuring transactions, handling federal and state registrations, litigating cases brought by or against developers, sponsors, declarants, individual unit purchasers and tenants, guarding against potential liabilities, terminating condominium and cooperative regimes, and advising management and marketing companies.
- We advise developers on mixed-use projects that involve multiple parties, intricate ownership schemes and diverse municipal, state and federal income and property tax issues, land use issues; counsel landlords on the most effective ways of dealing with tenants during conversions of rental properties to condominiums; and advise owners of commercial properties on converting them to residential use, and residents of subsidized projects into acquiring or privatizing them.
Clients seek out Holland & Knight's Condominium Development, Financing and Conversion Team for help navigating the issues associated with condominium development and management. We understand that transactions for condominium, co-op, condop, and mixed-use and leasehold condominium projects involve numerous demands arising from differing project components, the varying interests of the multiple parties in each transaction, and a number of complex and interrelated agreements. We have the experience required to meet these challenges.
Our clients include developers, owners, boards, management companies, equity investors, sponsors of condominium conversions, real estate investment trusts (REITs), mezzanine lenders, loan participants, loan servicers, receivers and asset managers across the United States.
Condominium and Co-Op Purchases, Sales, Conversions and Privatizations
Developers acquiring condominium projects rely on our team for advice regarding registration requirements and due diligence considerations, including warranties and construction defects, association operation issues and budget structuring. Our experience includes the following:
- representing the sponsors of the reconstruction and conversion-to-condominium ownership of many prestigious New York City properties, as well as the owners of several large residential buildings and complexes in the privatization of the state and city's Mitchell-Lama housing complexes
- representing developers in connection with the acquisition, development and conversion of thousands of condominium units nationwide
- advising clients on restructuring and terminating Florida condominium regimes, including preparation of plans of termination
- representing numerous multifamily property owners and developers regarding compliance with statutory requirements applicable to the conversion and sale of rental housing facilities in the District of Columbia
- representing the developer of a private island in the Bahamas with the proposed development of a mixed-use property to include a luxury hotel, golf course, villas and condominiums
- representing a Chicago-based developer in regard to numerous residential, mixed-use and condominium conversion projects, and advising numerous other developers regarding condominium conversions in Florida
- representing the developer of a high-end, vertical mixed-use project in Maryland consisting of for-sale residential condominium units, rental apartment units and retail outlets
- representing construction lenders in financing the development of billion-dollar residential and mixed-use projects in Hudson Yards, "Billionaires Row" and 432 Park Avenue
The complexities of condominium development are amplified when other uses – such as retail, offices and shared parking facilities – are on or adjacent to the site. Holland & Knight's condominium attorneys provide guidance on agreements governing interrelationships among the different uses, including cost sharing and allocation expenses, in developments that include resort, office, retail, hotel and residential components. Our experience includes the following:
- representing major international hoteliers and their affiliates in the development of hotel and residential condominiums, including projects in Florida and New York that will be part of high-profile, mixed-use developments
- representing lenders in analyzing and making construction loans, including for one of the tallest mixed-use buildings in New York City, as well as the developers of scores of other mixed-use properties in New York City
- representing the owners of the largest housing cooperative in the United States – which includes 15,372 apartments with 43,000 residents and three shopping centers – in refinancing and reconstruction
- representing the owners of two condominium associations containing 9,850 units and approximately 30,000 residents with financing and reconstruction of the buildings at minimal disturbance to the residents
- representing developers in a public/private condominium development that includes a public school, a public library, a health-related facility and government-subsidized housing
- representing a subsidiary of a Canadian resort developer in the acquisition and development of numerous condominium, multifamily and single-family projects within a Florida resort community
- representing numerous property owners and developers regarding creation of land and air-rights condominium regimes for purposes of the phased development and conveyance of land, and for the ongoing governance and operation of office parks, hotel sites and residential mixed-use projects
- representing the master developer in connection with the government concessions, entitlements, development and master planning of a world-class, 2,200-acre oceanfront mixed-use resort community that includes hotels, golf courses, marinas, recreational clubs, commercial complexes, fractional/timeshare and residential components
- representing the master developer in the first phase of a luxury mixed-use project located within a Costa Rican resort community that includes a hotel, private residences and a multiphased private residence club (a case of first impression in Costa Rica)
- representing a leading hospitality developer in connection with the development, operation and management of an upscale mixed-use hotel and condominium development located in the Los Angeles Sports and Entertainment District
- representing a Caribbean developer in connection with a 2,000-acre master-planned resort comprised of villas and single-family homes
- representing a Washington, D.C., developer and a New York developer in connection with Interstate Land Sales Full Disclosure Act (ILSA) filings for major mixed-use projects
- representing the developer of a mixed-use project in Napa, Calif., that includes a residential planned development as well as a commercial condominium with a hotel and a winery
- represented the owner in the conversion of numerous multistory buildings to commercial condominiums, as well as in the financing of the conversions and the sale of the commercial units
- represented the developer in a 110-acre urban renewal project on the Atlantic Ocean containing a park, an urban farm and sits for housing and retail
- represented the developer in a three-building development on the East River with affordable rentals, market rate rentals and for sale condo units, retail and parking
- represented a developer in redeveloping a campus with additional residential housing
The Holland & Knight team is seasoned in advising developers and owners in the formation and operation of commercial condominiums, including the conversion of existing buildings to commercial condominium space and the creation of a commercial condominium as a component of a complicated mixed-use development. Our attorneys work with developers in the creation, financing and sale of commercial condominiums throughout the United States, including commercial condominiums created under the California Commercial and Industrial Common Interest Development Act, (effective on Jan. 1, 2014) and the Florida Condominium Act (which was first adopted in 1976 and then amended many times, including most recently in 2014).
Distressed and Fractured Condominiums
Developers looking to acquire distressed condominium projects rely on Holland & Knight to handle all aspects of successor developer liability, including structuring transactions, restructuring the condominium regime to satisfy new operational needs, and terminating a condominium regime to decrease tax implications and enhance marketability of a bulk property sale.
In good economic times and bad, our team advises clients on how to most effectively position themselves to manage the risks and liabilities associated with ownership of inventory within a condominium regime, reposition project components to achieve the best use for the current market, and address operational setbacks and liquidity constraints facing condominium owners and associations.
Our recent matters include representing the proponents in Chapter 11 proceedings involving a 75-story, mixed-use building in Manhattan as well as workouts on dozens of co-op and condo projects.
We also have significant experience representing the spectrum of participants in fractured condominium deals, including original developers, successor developers, REITs, buyers and sellers of distressed assets, equity investors, commercial lenders, mezzanine lenders, loan participants and loan servicers, receivers and asset managers.
Our experience includes representing lenders in dozens of workouts of commercial and residential cooperatives and condominiums after the sponsor defaults.
Purchase and Sale Agreement Disputes and Litigation
Developers increasingly encounter federal and state lawsuits and judicial decisions spawned by individual unit purchasers attempting to cancel their real estate purchase contracts. Holland & Knight’s Condominium Development, Financing and Conversion Team provides counsel in many of these cases throughout the country, working with developers to strategize, take proactive measures and aggressively defend against these suits. In doing so, we analyze potential claims and rescission rights under applicable state condominium law, state securities law, the Interstate Land Sales Full Disclosure Act and federal securities laws.
Our team regularly advises developers in connection with construction defects related to their condominium projects. Working in collaboration with Holland & Knight construction lawyers, we have prosecuted numerous defect claims. We have also defended developers and sponsors in claims made by associations, tenants and purchasers.
Our attorneys have a wealth of experience advising and representing condo, homeowners association and co-op boards in all aspects of the operation of their properties and governance issues.
Management Company Considerations
As condominium associations face budgeting, assessment and collection challenges, management companies must protect themselves from direct liability to unit owners. We routinely advise clients on potential fiduciary duty obligations and potential liability arising from the relationship between the management company and the association board of directors.
Our team offers guidance on a broad array of operational issues to ensure that clients understand the legal rights and obligations of various parties under operative agreements. This is especially critical when condominium and co-op boards are made up of volunteers who may not have had experience dealing with the problems that can arise. We lead clients through the technical requirements of structuring and operating condominium regimes and associations. This includes reviewing existing condominium documentation to identify issues relating to developer rights and obligations; analyzing deficit and reserve funding status; and developing strategic plans for preparation and adoption of budgets as well as assessment collection.
An Experienced Team in Your Corner
In addition to bringing a breadth of knowledge to each project or transaction, members of Holland & Knight's Condominium Development, Financing and Conversion Team are very active in the industry in a variety of ways. Our lawyers have helped draft legislation on condominium law, and have served in such positions as chairman of the National Cooperative Bank and chairman of the Council of New York Cooperatives and Condominiums.