Condo Developers and Fiduciary Duties: An Unlikely Pairing?

“Condo Developers and Fiduciary Duties: An Unlikely Pairing?? provides an overview of the various issues that abound when real estate developers (new and experienced alike) develop condominiums for residential use. In what is now becoming a commonplace scenario, contractors and developers purchase a parcel of real estate, make minor improvements and sell the realty to unsuspecting consumers all over the United States, labeling those minor improvements as “luxury? renovations. Later, when those same unsuspecting consumers realize after closing that the renovations were nothing more than cosmetic band-aids, their community associations are underfunded and ill-equipped to handle financial and building-related issues, and the developer has skipped out, it becomes clear that what was once a great deal, has possibly become a real estate disaster. When developers abandon their buyers and the condominium association by failing to honor their fiduciary duties, the owners are in many instances left to pick up pieces of a broken project that was never capable of surviving the world into which it was born. This article exposes some old fundamental flaws in the nationwide legal perspectives on condominium law and developer obligations, and it highlights how some states in the Union, in the courts and the legislatures, have brought about some meaningful change. Then, this article offers solutions that the author feels should become the next “standard? in condominium closing. While not all states across the Union were examined, (because not all states reported appellate and supreme court cases on developer issues and fiduciary responsibilities), the author was able to find a good wealth and breadth of issues from near and far in order to expose the good and bad, and the ugly in the law of fiduciary duties in the condominium context.