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Business Organization

Condominium Project is to be Rebuilt or Sold)
Assume that you are representing the developer of a new condominium project and have been asked to draw up and appropriate set of declarations for the condominium. Having reviewed the declarations drawn up by your firm several years ago for the same client, when the client built another condominium project, you have decided that most of the changes to be done can be made by one of your bright, young associates.
When the previous declarations were drafted (before you joined the firm), no provision was made for rebuilding or selling the condominium project as a whole. During the years that have passed since the condominium projects first became popular, it has gradually become evident that some provision must be made for allowing the rebuilding or sale of the entire condominium project.
Because of the fact that each unit owner in a condominium also owns an undivided interest in all of the common elements, it would be impossible to sell the whole condominium project without the consent of each unit owner-unless the declarations contain appropriate provisions for sale.
Keeping in mind the necessity of protecting the individual unit owner, as well as the need to be able to rebuild or sell the entire project when necessary, draft an appropriate buy out provision (or ‘obsolescence clause’) to be included in new condominium declarations.
As you begin drafting an appropriate provision, you may want to look at the Pointers for Drafting that follow.
There is at least seven things to consider when drafting a buy-out provision to be included in condominium declarations.
1 Under what conditions should the entire project be rebuilt or sold?
2. Who decides whether the circumstances alleged actually meet the requirements specified in the declarations for rebuilding sale?
3.How many of the unit owners must agree with the plan before rebuilding or sale can take place?
4. who has the authority to rebuild or sell the entire project?
5.How much notice is to be given to individual unit owners before the project as a whole is rebuilt or sold?
How is payment to be made to unit owners?
Be sure that the power of attorney does not violate the Rule Against Perpetuities.

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