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  1. #1
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    Feb 2016
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    Default Vote of Owners on Conveying a Condo Community to a Developer

    My question involves real estate located in the State of: Texas
    I live in a condominium project . The bylaws state that in order to sell and convey condo each owner is responsible for their own. Now there is talk that they want to take a vote to make it if 80% of the homeowners want to sell to a developer the rest 20% would have to sell the same developer at "fair market value". The question I have is if that happens , what would happen to homeowners who have bought recently and would be underwater ? If they have to sell would they still owe the mortgage company even though they don't live there anymore?

    Would appreciate your inputs.

  2. #2
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    Mar 2013
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    16,862

    Default Re: Vote of Owners on Conveying a Condo Community to a Developer

    I'm guessing that the people doing the "talking" are the usual idiots who know nothing about HOA law.

    I seriously doubt that such a decision could be legally accomplished in the first place let alone obligate the 20% to sell when it would be impossible to sell the unit without the seller coming up with ALL the money to retire the mortgage even though the mortgage was more than the value of the unit.

  3. #3
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    Default Re: Vote of Owners on Conveying a Condo Community to a Developer

    If the declaration does not permit a lesser agreement, then all condo owners must agree to any termination of the condominium. If the declaration permits the termination based upon an 80% vote, then that was something of which you were (technically) made aware at the time you purchased the property.
    Quote Quoting Texas Property Code, Sec. 82.068. Termination of Condominium.
    (a) Unless the declaration provides otherwise and except for a taking of all the units by condemnation, a condominium may be terminated only by the agreement of 100 percent of the votes in the association and each holder of a deed of trust or vendor's lien on a unit. The declaration may not allow a termination by less than 80 percent of the votes in the association if any unit is restricted exclusively to residential uses.

    (b) An agreement of unit owners to terminate a condominium must be evidenced by the execution or ratification of a termination agreement by the requisite number of unit owners. If, pursuant to a termination agreement, the real property constituting the condominium is to be sold following termination, the termination agreement must set forth the terms of the sale. To be effective, a termination agreement and all ratifications of the agreement must be recorded in each county in which a portion of the condominium is located.

    (c) The association, on behalf of the unit owners, may contract for the sale of real property in the condominium, but the contract is not binding on the unit owners until it is approved under Subsections (a) and (b). If the real property constituting the condominium is to be sold following termination, on termination title to that real property vests in the association as trustee for the holders of all interests in the units, and the association has all powers necessary and appropriate to effect the sale, including the power to convey the interests of nonconsenting owners. Until the sale has been concluded and the proceeds distributed, the association shall continue to exist and retains the powers it had before termination. Proceeds of the sale must be distributed to unit owners and lienholders as their interests may appear, in proportion to the respective interests of unit owners as provided by Subsection (f). Unless the termination agreement specifies differently, as long as the association holds title to the real property, each unit owner and the owner's successors in interest have an exclusive right to occupy the portion of the real property that formerly constituted the owner's unit. During that period of occupancy a unit owner and the owner's successors in interest remain liable for all assessments and other obligations imposed on unit owners by this chapter or the declaration.

    (d) If the real property constituting the condominium is not to be sold following termination, on termination title to the real property vests in the unit owners as tenants in common in proportion to their respective interests, and liens on the units shift accordingly. While the tenancy in common exists, a unit owner and the owner's successors in interest have an exclusive right to occupy the portion of the real property that formerly constituted the owner's unit.

    (e) Following termination of the condominium, and after payment of or provision for the claims of the association's creditors, the assets of the association shall be distributed to unit owners in proportion to their respective interests. The proceeds of sale described by Subsection (c) and held by the association as trustee are not assets of the association.

    (f) The interest of a unit owner referred to in Subsections (c), (d), and (e) is, except as provided by Subsection (g), the fair market value of the owner's unit, limited common elements, and common element interest immediately before the termination, as determined by one or more independent appraisers selected by the association. The decision of the independent appraisers shall be distributed to the unit owners and becomes final unless disapproved by unit owners of units to which 25 percent of the votes in the association are allocated not later than the 30th day after the date of distribution. The proportion of a unit owner's interest to that of all unit owners is determined by dividing the fair market value of the unit owner's unit and common element interest by the total fair market values of all the units and common elements.

    (g) If a unit or a limited common element is destroyed to the extent that an appraisal of the fair market value before the destruction cannot be made, the interest of a unit owner is the owner's common element interest immediately before the termination.

    (h) Foreclosure or enforcement of a lien or encumbrance against the entire condominium does not of itself terminate the condominium, and foreclosure or enforcement of a lien or encumbrance against a portion of the condominium does not withdraw that portion from the condominium, unless the portion is withdrawable real property or unless the mortgage being foreclosed was recorded before the date the declaration was recorded and the mortgagee did not consent in writing to the declaration.

    (i) By agreement of the same percentage of unit owners that is required to terminate the condominium, the unit owners may rescind a termination agreement and reinstate the declaration in effect immediately before the election to terminate. To be effective, the rescission agreement must be in writing, executed by the unit owners who desire to rescind, and recorded in each county in which any portion of the condominium is located.
    If proper procedures are being followed to terminate the condominium and to sell the property, and you are worried about being short-changed in the process, you and the other objecting condo owners should consult a real estate lawyer who specializes in this type of matter to have the case reviewed, and to see what the lawyer might be able to do in order to protect your rights or get you a better price.

  4. #4
    Join Date
    Feb 2016
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    10

    Default Re: Vote of Owners on Conveying a Condo Community to a Developer

    Quote Quoting Mr. Knowitall
    View Post
    If the declaration does not permit a lesser agreement, then all condo owners must agree to any termination of the condominium. If the declaration permits the termination based upon an 80% vote, then that was something of which you were (technically) made aware at the time you purchased the property.

    If proper procedures are being followed to terminate the condominium and to sell the property, and you are worried about being short-changed in the process, you and the other objecting condo owners should consult a real estate lawyer who specializes in this type of matter to have the case reviewed, and to see what the lawyer might be able to do in order to protect your rights or get you a better price.
    Thank you very much for this very valuable information. It really answered a lot of my questions. I know it says they pay off all mortgages. I was just wondering would there by any circumstance that some homeowners would still be stuck with their mortgages. The reason I am asking is that I heard about that in Florida that this happened and some homeowners who were underwater were still stuck with paying the mortgages even though they did not own the property anymore or lived there. Would appreciate if you shed light on this.

  5. #5
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    Default Re: Vote of Owners on Conveying a Condo Community to a Developer

    You're not asking about Florida. You're asking about Texas. Florida actually has a statute that is more protective of owners. In Texas, at least as the statute is written, you could end up owing money to your lender even after application of the buy-out to your mortgage balance.

  6. #6
    Join Date
    Feb 2016
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    10

    Default Re: Vote of Owners on Conveying a Condo Community to a Developer

    Quote Quoting Mr. Knowitall
    View Post
    You're not asking about Florida. You're asking about Texas. Florida actually has a statute that is more protective of owners. In Texas, at least as the statute is written, you could end up owing money to your lender even after application of the buy-out to your mortgage balance.
    Thats what I thought. I was just trying to compare the two for more information. I think it could be a situation like foreclosure when people who lose their property , the mortgage company could still come after them after the foreclosure for deficiency.

    Thanks again for great piece of information.

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