Saturday, October 25, 2008

When Condominiums Become Obsolete

What Determines the Lifespan of a Common Interest Development?

"Obsolescence” is the process by which something loses its value and relevancy usually due to being supplanted by a better product or changes in its environment. Several times we have written about our concerns for the impact of that process on common interest developments.

First, let's realize that the obsolescence of common interest developments, as with most man-made structures, is inevitable. It can't be stopped; it’s simply a matter of time. If you doubt that, ask yourself how many residential buildings that you know have lasted, say 100 hundred years or more. Look around and you’ll see only a few types of buildings that have survived the century mark--public monuments, and buildings that have historic or intrinsic value due to their unique location or architectural style. Most others have been replaced with newer structures...

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  1. When common element becomes more expensive to maintain and Master Deed requires 100% owner consent and only 90% vote to demolish it-what options does Board have? Would a court in Equity allow the majority to act if they can show the continued maintenance is more expensive then originally anticipated?

  2. There are various legal avenues to relieve owners from being stuck with a property that has become obsolete. Many states have statutes that permit a court to override deed restrictions where a property has become obsolete, and a majority of owners have requested the court to intervene. There can also be statutes that allow a court to "partition" (divide) the interests of multiple owners in a single parcel. Finally, Eminent Domain (condemnation statutes) can be utilized by a local entity to force the owners to upgrade or sell, or to otherwise cause an obsolete property to be re-developed. Consult with a real estate attorney in your state to see what options are available.