Appeals Court Sides With Biscayne 21 Condo Owner Holdouts In Closely Watched Buyout Case

Two Roads Development lost another battle in the fight for a buyout at the 61-year-old Biscayne 21 condo building, which it hopes to replace with luxury condo towers. Legal experts say the ruling could set a new precedent that makes it harder for developers to replace aging buildings with new construction.

The Third District Court of Appeal ruled this week to block Two Roads' condo termination plan and ordered the trial court to enter a temporary injunction, denying Two Roads’ request for a rehearing, The Real Deal reported.

Two Roads and the holdout owners have been waiting on the court ruling since last year. The judges ruled that the condominium's original declaration gave each unit owner an effective veto over the termination.

Two Roads plans to appeal the decision to the Florida Supreme Court.

“We are pleased that the Third District Court of Appeal has certified this case to the Florida Supreme Court,” Two Roads Managing Partner and co-founder Taylor Collins said in a statement. “This is exactly what we asked for from day one, and we believe the issue deserves to be heard by the highest court in the state. We look forward to continuing this process and remain confident in the path ahead.”

The developer purchased the majority of the units at Biscayne 21 for $150M in 2022 and later that year launched sales for its planned three-tower luxury condo branded by Marriott International’s Edition.

But the condo association termination didn’t go to plan. In 2023, 10 residents of the 13-story, 192-unit Edgewater condo tower filed to block the demolition of the property. The association accused Two Roads of illegally lowering the required approval threshold for a condo buyout from 100% to 80%.

While a lower court initially allowed Two Roads to proceed, the owners gained the upper hand when the Third District Court of Appeal in March 2024 found fault in the initial decision, slapping the developer with a temporary injunction. The judges upheld that ruling this week, ordering the Circuit Court for Miami-Dade County to rehear the case.

“They obviously took the time to get it right,” Armstrong Teasdale attorneys Glen Waldman and Jeffrey Lam, who represent the holdout owners in the case, said in a statement. “Our clients have been out of their forever homes for close to two years because of the developer's cavalier attitude to the governing documents of the condominium and the livelihoods of our clients.

“Now the appellate court has twice said what they did was wrong, this time clear and emphatically.”

Biscayne 21 has become the poster child for condo termination headaches in South Florida. Developers have grown hesitant about pursuing condo terminations because of unclear legal standards and the fear of drawn-out litigation.

The ruling comes against a backdrop of a condo market “doom loop,” driven by recertification and reserve funding mandates for aging condo buildings in response to the collapse of the Surfside condo tower in 2021 that killed 98 people.

While the ruling isn't likely to stop all condo buyouts, it may deter some developers, investors and equity investors from pursuing deals, Bilzin Sumberg attorney Joseph Hernandez said Friday. 

“This case could be going on for another year and a half, two years. Who knows?” Hernandez said. “And that's a problem, because of that black cloud space it sits there. It's not resolved. So if we start talking about our savior, it has got to be the legislature at this point.”

Despite developer hopes for a clearer path to forced termination and demolition of condo associations and their buildings in this year's legislative session, Gov. Ron DeSantis signed an updated condo safety law that left those concerns unaddressed.

Hernandez, who originally represented the seller group when the first bulk transaction for Biscayne 21 happened and later served as an attorney for the association as special counsel, said the ruling sets a new precedent.

“What’s disturbing to me is that it kind of establishes a new precedent that didn’t exist before this case,” Hernandez said. “When there’s 100% approval required for a termination, it’s an implied veto right on behalf of all the unit owners. That’s never been done before. This court basically just created it.”