Judge Orders Developer To Repair 'Zombie' Condos After Termination Ruled Illegal

After 10 holdout condo owners successfully sued to block Two Roads Development's plan to demolish their building and replace it with luxury condos, a judge has ordered the developer to repair their units to a habitable condition so residents can move back into the building, which has sat vacant for nearly three years.

The ruling, signed by Miami-Dade Circuit Court Judge Thomas Rebull on Monday, orders Two Roads to restore the Edgewater building to its May 2023 condition and bars the developer from seeking a rezoning or demolition permit at the property. 

"It’s been almost two and a half years since TRD kicked our clients out of their homes, stopped providing utilities and services to the condominium, and began stripping the building and our clients’ units," said Jeffrey Lam of Armstrong Teasdale, an attorney and representative, alongside Glen Waldman, for the owners of the units.

Two Roads purchased the majority of units at the 61-year-old Biscayne 21 in 2022 for $150M, then instituted changes to the association's bylaws to lower the voting threshold for termination — which would have paved the way for a redevelopment — from 100% to 80%.

Two Roads then emptied the building and shut off its utilities, and it has sat vacant since, described by The Wall Street Journal in 2024 as a “zombie on prime waterfront land.” Rebull required the developer to reinstate the association and provide an engineering report on Biscayne 21's condition within 45 days.

"This is old news," Two Roads Managing Partner Taylor Collins told Bisnow via text message. "The judge is just finally filing the order. Everyone knew this was coming."

He declined to comment further.

Biscayne 21 is a 13-story, 192-unit waterfront condo tower at 2121 N. Bayshore Drive that Two Roads initially planned to demolish and replace with three luxury condo towers with a Marriott International Edition flag.

Two Roads took out a $45M mezzanine loan from Lionhearted Strategic Management LLC and a $105M senior mortgage loan from Bank OZK to buy the majority of the units in 2022 and force a termination. But the 10 unit owners who refused to sell filed a lawsuit to void the termination in 2023.

The circuit court initially ruled in Two Roads' favor, allowing it to proceed with the project, for which it was preselling units for $1.7M and up.

But the Third District Court of Appeal reversed that decision in March 2024, placing a temporary injunction on the developer and ruling it couldn't terminate the condo association without the consent of all of its residents. The ruling stunned developers, who have increasingly pursued condo buyouts in recent years.

Two Roads asked the court to rehear its appeal of the decision, only for judges to rule in favor of the residents again in July. In October, the Supreme Court of Florida declined to take up the case, cementing the ruling in Biscayne 21's favor and leaving the circuit court to handle the outcome.

Rebull's ruling brings a painful conclusion to the saga for Two Roads. It must now spend likely millions of dollars to bring the building back to what it was before the suit, Bilzin Sumberg real estate attorney Joseph Hernandez said.

“This is absurd beyond belief,” said Hernandez, who is not involved in the case. “I can’t believe this has gotten this far.”

The situation has become a case study for condo association termination headaches, leaving many hesitant to pursue condo buyouts due to fears of drawn-out litigation.

Many in the industry expected the Florida Legislature to address their concerns last year, but the session ended with a condo bill that did nothing to clarify the law.

State laws passed in the wake of the deadly Surfside collapse mandate recertification and reserve funding for buildings at least 30 years old. The rules have turned up the financial pressure on residents as repair costs and association fees skyrocket.

More and more have been looking for developers to buy out their units and buildings to escape mounting costs.

But even if condo owners are more open to the idea, the Biscayne 21 ruling made it clear that just a handful of holdout owners can blow up a project.

“If you don’t get 100%, you have a very serious amount of risk accomplishing these deals," Hernandez said.