A condo deconversion can promise relief from mounting assessments, insurance premiums and deferred maintenance. But as the Biscayne 21 dispute illustrates, it can also leave owners displaced, buildings gutted and years of litigation in its wake.
Owning a condominium is often thought of as the perfect opportunity to be able to own a home without having to take on the maintenance associated with owning a standalone home. However, in certain situations, condo ownership can come with a hidden risk—one that can upend lives, finances and entire communities.
Recent litigation in Florida over the attempted deconversion of the Biscayne 21 condominium serves as a stark reminder that condominium ownership can carry unexpected—and sometimes devastating—consequences for unit owners, while simultaneously creating lucrative opportunities for investors and developers.
A condo deconversion can promise relief from mounting assessments, insurance premiums and deferred maintenance. But as the Biscayne 21 dispute illustrates, it can also leave owners displaced, buildings gutted and years of litigation in its wake.
What is a Condo Deconversion in Plain English?
Most states allow condominiums to undergo a “deconversion” (which in some states is referred to as a termination or a bulk sale), which is a process wherein a condominium is dissolved, and the property is converted into another form of ownership—most commonly rental apartments.
Typically, an investor makes an offer to purchase all the units in a condominium, often through negotiations with the condominium association’s board. That offer is then submitted to the unit owners for approval. Depending on state law and the condominium’s governing documents, approval may require anything from a two-thirds’ vote to unanimous consent. Additionally, many states have included various owner protections in their condominium acts that should be analyzed whenever a deconversion is contemplated by either an association or a prospective developer or investor.
If the aforementioned vote is obtained, the condominium is terminated, unit owners (or their lenders) are paid for the value of their units, and the property is repurposed. For developers, the upside often lies in the long-term income potential of rental units or the ability to renovate an aging building. For unit owners, there can also be an upside to the deconversion, but it may not be as readily apparent.
In a typical situation, an investor deals directly with the association who, in turn, is given the power to negotiate the sale of the units subject to a full association vote after the negotiation is finalized. However, in certain situations, investors decide that it is easier to acquire enough units to gain control of the association before moving forward with the deconversion vote.
What Can Lead to a Condo Deconversion?
The need to terminate a condominium can arise from one of several issues or a combination of issues. Some situations that may lead to a condo deconversion include:
- The Market for Rentals—In markets where rental demand far outpaces demand for condominiums, a building may simply be worth more as apartments than as individually owned units. This is particularly true in oversaturated condo markets such as New York, Chicago and throughout the state of Florida;
- The Cost of Maintenance—Older condominiums frequently face significant repair obligations involving roofs, elevators, façades and building systems. Special assessments to fund these repairs can exceed the value of individual units, especially for owners on fixed incomes;
- Mismanagement or Discord—Years of deferred maintenance, ineffective governance, or owner infighting can leave buildings in poor condition and boards unable to chart a viable path forward; and
- Insurance and Financing—Condominium ownership can become impractical when insurance is unavailable or prohibitively expensive, a problem highlighted by catastrophic events like Surfside. Lender hesitancy—especially for Fannie Mae and Freddie Mac–backed loans in buildings needing major repairs or facing large assessments—can reduce buyer demand and increase foreclosure risk for current owners unable to absorb rising costs.
The Biscayne 21 Condo Litigation
Biscayne 21 is a condominium in Miami’s Edgewater neighborhood that was built in 1964 and was made up of 192 units. In 2022, a developer started buying the units within the condominium and eventually was able to purchase 183 of the 192 units with the intention of turning the condominium into luxury apartments.
Biscayne 21 submitted to Florida’s Condominium Act by recording a condominium declaration in 1974. The declaration for the Biscayne 21 condominium required unanimous consent to terminate the condominium. However, after acquiring the majority of the units within the condominium, the developer amended the condominium documents to lower the threshold necessary to vote for a deconversion down to 80%—which is in line with the current iteration of Florida’s Condominium Act that requires at least 80% of unit owners to vote in favor of a termination of the condominium. The unit owners who do not voluntarily sell to the developer filed a lawsuit asking the court to rule that the amendment was improper because the declaration provided voting rights could not be changed without unanimous consent and to enjoin the planned deconversion.
While the trial court initially sided with the developer, the Third District Court of Appeal reversed, holding that the amendment was invalid because it changed voting rights without unanimous consent. As a result, in a situation where a Florida condominium declaration includes similar language to the Biscayne 21 declaration, each unit owner has an absolute “veto” right that can block any possible deconversion. The Florida Supreme Court declined review, and the case was officially sent back to the trial court.
The appellate rulings did not end the case, however. In early 2026, a circuit court judge in Miami-Dade County ordered the developer to fully restore the condominium building to its 2023 condition (which apparently had been “gutted” by the developer), including the restoration of all utilities and amenities at the developer’s expense. The judge also ruled that the developer could not take any steps to terminate the condominium.
The developer has since filed a new lawsuit on Jan. 30, 2026, asking the court to allow for an equitable termination or to allow for a partition sale. In that lawsuit, the developer claimed that a restoration would cost over $60 million and is an “economic waste.” Additionally, certain owners are now seeking millions of dollars in damages for wrongful dispossession and civil conspiracy, among other claims. As of the date of this article, there are still many open issues that will need to be decided in the now-years’ old litigation over this attempted deconversion.
Importance of the Biscayne 21 Ruling and Takeaways
The Biscayne 21 deconversion attempt, and the subsequent litigation, creates a very important example of what can happen once a developer (and possibly the condominium association) makes the decision to attempt a deconversion of a condominium. Some of the key takeaways include:
- Governing Documents Matter—Especially in Florida, statutory changes to the Condominium Act do not necessarily override existing declarations. Developers and associations must scrutinize condominium documents before pursuing deconversion;
- Deconversions Aren’t Always a Safety Net—While a deconversion can help owners escape potentially devastating costs, a failed attempt can leave a building in worse shape, with years of legal battles and uncertainty;
- Lender Risk May Increase—Although the ruling may have a positive effect on the holdout unit owners, it may make aging condominiums less attractive to lenders who would typically be paid off as part of a deconversion process and, instead, would be left to foreclose on the unit(s) if the unit owners cannot afford the mortgage and the maintenance necessary to operate the building;
- Preventing Forced Buyouts—Unit owners in Florida condominiums with more than 80% consent provisions regarding termination or changing voting rights now have strong, enforceable protection against forced buyouts; and
- Potential Investors Face Heightened Risk—The ruling may also have a negative impact on investors who could come in and save an aging condominium or a condominium in disrepair and provide an exit ramp for unit owners who cannot afford their units with increasing insurance or assessments. This ruling, and the financial impact of having to spend millions of dollars on attorney fees fighting lawsuits, and ultimately on repair costs, could have a chilling effect on deconversions generally, especially where the operative documents require unanimous consent. If nothing else, it will require significantly more time and money spent in the “due diligence” phase by an investor before moving forward with acquiring individual units.
Many times, there will be winners and losers when a condominium is faced with the threat of deconversion. Although developers are often perceived as the beneficiaries and unit owners as the casualties, the reality is more complex. Sometimes, deconversion is the only viable option to prevent foreclosures, forced sales at a lower price (that could affect the value of all units in a building), bankruptcies or displacements, and if the total value of the condominium building exceeds the value of the units themselves, a deconversion can provide a maximum return on investments for the units. The Biscayne 21 situation, however, demonstrates an important counterpoint: a single holdout owner may be able to block a deconversion, which could entirely reshape the risk (and reward) possibility for everyone involved.
Reprinted with permission from the March 19, 2026 edition of the Daily Business Review © 2026ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com.
