When the Investors Arrive...

100% is to high. 80% is good. 90% is better but not 100%.

As I understand it, if 80% agree to a buyout the remaining 20% are forced to take it. Typically an investor will say that we will buy your unit for say $200K if 80% of all owners agree. Typically, the investor (now the owner of the association) will turn the units into rentals.

I have seen versions where the buyer will offer some sort of arrangement where one can sell but keep living in the building. This often swings the deal as many do not want to relocate.

I was also looking for the statute section that says owners are forced to sell. Presumably these owners are among the 20-% who opposed the termination of the association. Does this statute section say they have to sell if the termination agreement in parts A and B of 33-1228 so specifies?

ARS 33-1228
...
D. The association, on behalf of the unit owners, may contract for the sale of real estate in the condominium, but the contract is not binding on the unit owners until approved pursuant to subsections A and B of this section. If any real estate in the condominium is to be sold following termination, title to that real estate on termination vests in the association as trustee for the holders of all interest in the units. Thereafter, the association has all powers necessary and appropriate to effect the sale. Until the sale has been concluded and the proceeds of the sale distributed, the association continues in existence with all powers it had before termination. ...

I am sure CathyA3 noticed how the main investors at this Arizona condo come from Chicago. Chicago's apartment/condo buildings are a bit notorious for flipping from apartment to condo and vice-versa, all depending on market conditions.

Here are some tales of woe from Florida:

https://archive.naplesnews.com/business/florida-law-lets-investors-force-out-condo-owners-at-a-loss-ep-597777368-330730071.html/
http://america.aljazeera.com/watch/shows/america-tonight/articles/2015/10/19/florida-condo-law-losses.html (even Al Jazeera covered this)

Reading between the lines in the first article, it's possible that this is state specific.

IANAL. However, my previous comment about how condo owners in this situation owned a fractional share of something that no longer exists makes me think that this is not state specific. I know during the last housing downturn, there was scuttlebutt going around my state that we should pay attention to our rental restriction because the investor crowd was starting to look at my state. Fortunately for us, housing and the economy in general began to pick up in late 2011 and took off with a vengeance, so there no longer were places going for a song.

And there have been recent articles in publications like the NY Times and the Washington Post about investors targeting housing in general in the US, which is another reason I think the forced sale of condos is not state specific.

So far the way I read ARS 33-1228 is that

-- Part A through Part B permits 80%+ of owners to agree to terminate the COA, and as part of the vote to terminate, the 80+% also voted on the particulars of the "termination agreement."

-- Part C says:

C. A termination agreement may provide that all the common elements and units of the condominium shall be sold following termination. If, pursuant to the agreement, any real estate in the condominium is to be sold following termination, the termination agreement shall set forth the minimum terms of the sale.

If the 80%+ want the termination agreement to require every owner to sell his/her condo units, then part C seems to say this is lawful. The owners in the 20%- (who opposed the termination of the COA) may not lawfully decline.

Such is my reading at the moment.

Right now I think the article linked in the first post of this thread got it right.

I wonder if the owners at the Fountain Hills, Arizona COA have a false sense of safety when they get people on the board who oppose termination. All it takes is an investor to gather 80% of the votes and call a Special Meeting. Said investor will be well-armed with an attorney. The Board will have no choice but to call for a vote. Granted the Board will be well-armed with an attorney, too.

In our community, it's 100%, so if even one person says no, the HOA can't be dissolved.

Unfortunately, as Cathy notes, all the investor needs is a simple majority to wreck havoc on the community. The units he or she controls become rentals and so on you see all sorts of people moving in and out. Too many investors are cheap and soon the community gets run down, wrecking property values, and if you're among the holdouts, you may find it difficult to get refinancing for your mortgage or homeowners insurance (because the entire place is now considered rental property). The only way out is to sell your home at a loss to - the investor.

My state is next door to Cathy's and sadly our state legislature is bought and paid for by everyone who's only in it for the money. We can't get anything that really helps the average person, but the state likes to crow how business friendly it is.

To wit - there have been stories in the local paper over the last year or two about our of state companies who own several apartment complexes that are so poorly maintained, your do better living in a tent. There was a proposal to increase tenant rights to withhold rent when the landlord refuses to make the place even habitable (like ensuring it has running water so the tenant doesn't have to go to a neighbor across the street to fill up buckets from his water hose to have something for the kids to wash in. And that's a true story.

So what did the legislature do? Let the bill die in committee. One representatives he owned two small apartment and said he was add is tenants would be tempted to she for trivial stuff if he didn't drop everything and fix it or some nonsense.

And those were apartments - there are rental houses that are just as bad. Yet, the legislature would have you think lots and lots of investor owned housing is a good thing.