Florida condominium owners in older buildings are increasingly hearing a phrase that many did not expect when they bought their units: "termination plan." Under Florida Statutes Section 718.117, a condominium association can vote to dissolve the condominium and sell the entire property to a buyer. For many unit owners, especially those living in aging coastal buildings facing enormous milestone inspection repair bills, a termination plan may be the most practical solution.
But a condo termination is a major legal event with significant consequences for every unit owner, whether they voted for it or against it. Barrett Henry is a Broker Associate at REMAX Collective with more than 23 years of Florida real estate experience. He has helped unit owners navigate condo sales, bulk buyout decisions, and complex real estate situations across Tampa Bay and statewide. This guide explains how Florida condo terminations work and what your options are.
Why Are Condo Terminations Increasing in Florida?
The pace of Florida condo terminations has accelerated significantly since 2022. The primary driver is Florida's milestone inspection law (SB 4-D/HB 1021), which requires structural inspections of buildings three or more stories tall and mandatory reserve funding for eight structural components. Many older buildings failed Phase 1 or Phase 2 inspections and are now facing repair and reserve funding costs of tens of thousands of dollars per unit.
When the cost of repairs exceeds the value of individual units, or when an association cannot collect enough in special assessments (because unit owners cannot pay and face foreclosure), termination and sale of the entire building becomes the most viable path. Developers who want the land for new construction have been active buyers in these situations.
How the Florida Condo Termination Process Works
A condo termination under F.S. 718.117 follows a specific legal process:
- Termination plan drafting: The association board or a group of unit owners drafts a termination plan that includes the proposed sale terms, the buyer (if identified), and the proposed allocation of proceeds to each unit owner.
- Independent appraisal: The plan must include an independent appraisal of the property and an allocation of value to each unit, either based on ownership interest in the common elements, appraised value of each unit, or a combination.
- Owner vote: The plan must be approved by at least 80% of the total voting interests. Each unit owner receives formal notice and a copy of the plan before the vote.
- Recording: Once approved, the termination plan is recorded in the county official records. At this point, non-consenting owners\' ability to block the sale ends (though they retain the right to challenge their allocation in court).
- Distribution of proceeds: After closing, each unit owner\'s share of the proceeds is first applied to pay off their mortgage(s) and liens, with any remaining equity paid to the owner.
What Unit Owners Receive in a Termination
The amount you receive from a condo termination depends on the overall sale price and how the proceeds are allocated to your unit. The allocation formula -- ownership interest percentage or individual unit appraisal -- matters enormously. A unit owner with a larger unit, better views, or a higher floor may receive a disproportionately higher allocation if the plan uses appraised value rather than ownership percentage.
If your unit has a mortgage, it is paid from your proceeds first. If there is equity left over, you receive the balance. If the allocation for your unit is less than your mortgage balance, Florida law requires the plan to guarantee you at least enough to pay off your mortgage, or the plan cannot compel your participation over your objection. This is an important protection -- you cannot be forced into a short payoff without your consent.
Challenging the Allocation in Court
Even if the termination vote passes and you are legally required to participate in the sale, you retain the right to petition a Florida circuit court to determine the fair market value of your specific unit if you believe the association's allocation is too low. This right to seek judicial determination of fair value is preserved even after the termination plan is recorded and the sale closes.
If you intend to challenge an allocation, act quickly. An experienced Florida real estate attorney can file the petition and request an independent court-appointed appraisal. This process does not stop the sale, but it can result in a higher payout to you.
Selling Before the Termination Vote
If your condo association is discussing or planning a termination and you do not want to participate, selling your unit on the open market before the termination vote is recorded is often the most flexible option. You control the sale price, timeline, and terms. A buyer may be willing to pay more for your specific unit than the termination plan's allocation would provide, particularly if the building is attractive or the unit has premium features.
Barrett Henry has experience working with condo sellers in complex situations, including buildings facing milestone inspection issues, special assessment risk, and association financial distress. Contact us through our get help page to discuss a sale before a termination vote locks in the allocation.
What If You Cannot Afford to Keep the Unit Until Termination?
If your condo association has already levied large special assessments related to milestone inspection repairs, and you cannot pay them, you may face a condo association lien and foreclosure proceeding under F.S. 718.116 -- separate from and prior to any termination proceeding. A condo association has the right to foreclose its lien for unpaid assessments.
Options if you are facing assessment-related foreclosure include:
- Requesting a payment plan from the association
- Selling before the foreclosure is completed
- Pursuing a short sale if the unit is underwater
- Working with a cash buyer who can close quickly
- Filing Chapter 13 bankruptcy to implement an automatic stay and a repayment plan for the arrears
Our HOA vs. mortgage foreclosure guide explains the difference between condo association foreclosure and lender foreclosure, and what happens when both are pursuing you simultaneously.
