Sellers of condominium units often rely on their realtor to make sure the proper disclosures are made in the contract. The Florida Bar and Florida Realtors have adopted a form Condominium Rider which provides not only the disclosures required by the Florida Condominium Act, but also additional disclosures designed to cover some of the issues that aren’t immediately apparent or available to the buyer with respect to the condominium association.
While the information is helpful to the buyer, sellers need to be aware of what the disclosures mean and what their obligations are in order to avoid losing the buyer, or facing a potential misrepresentation claim.
Condominium Association Approval
The association may have the right to approve the buyer. If such right exists in the Condominium Declaration, the approval must be done so within a specified amount of days prior to closing. Both, the buyer and seller must make a diligent effort to obtain such approval. If such approval is not granted within the specified time frame, the contract shall terminate and the buyer will be refunded the deposit.
Right of First Refusal
The association and/or the members of the association may have a right of first refusal within a specified time period. If such right exists in the Condominium Declaration, the association, its members, or both, must either provide written confirmation to the buyer that they will not exercise the right of first refusal or fail to exercise such right in a timely manner, or the contract shall terminate.
Fees; Assessments; Prorations; Litigation
Assessments. The seller must represent to the buyer the amounts of current association assessments (for both the condominium association and any “master” association) and rent of recreation areas, if any. All annual assessments levied by the association and rent on recreational areas shall be made current by the seller at closing, but shall be prorated for any portion of prepayments attributable for time post-closing.
Fines and Fees. The seller shall pay, at closing, all fines imposed against the unit by the association as of the closing date and any fees the association charges to provide information about the property, assessment(s), and fees.
Special Assessments. Under Condominium Rider 3(c)(I), the seller must disclose any special or other assessment that the seller is aware of. As written, the Condominium Rider provides a representation that the seller is not aware of any special or other assessment that has been:
- Levied by the association;
- That has been an item on the agenda; or,
- Reported in the minutes, of the association within the last (12) months prior to effective date.
Heed warning to the Seller. If the seller is or was on the board of the association within the last (12) months prior to effective date, he or she may be deemed to have been aware of items on the agenda or ones reported in the minutes. Further, the Condominium Rider provides that if “pending” special assessments “exist” as of the effective date and have not been disclosed above by the seller, then the seller shall pay such assessments in full at the time of closing. This language puts the burden on the seller to make sure that any special assessments found in the minutes or on the agenda within the last 12 months, whether passed or not, be disclosed.
Buyer’s Request for Documents
The buyer is entitled, at seller’s expense, upon request (which appears as a box checked) to current copies of:
- Declaration of Condominium;
- Articles of Incorporation;
- Bylaws and Rules of the Association; and
- Copy of the most recent year-end financial information and frequently asked questions and answers document.
Common Elements; Parking
The seller’s right and interest in his/her parking space(s), garage, and other areas are included in the sale of the property. These rights and interest shall be assigned to the buyer at closing. However, the Condominium Declaration must be reviewed to determine whether such facilities do automatically convey with the unit.
Inspections and Repairs
The inspection and repair rights and obligations found in the contact are limited to the seller’s individual unit. Unless the seller is responsible, these rights and obligations do not extend to common elements, limited common elements, or any other part of the condominium property.
The buyer is entitled to receive from the seller a copy of the governance form, summarizing the governance of the condominium association. Chapter 718, Florida Statutes. The required format is provided by the Division of Florida Condominiums, Timeshares, and Mobile Homes of the Department of Business and Professional Regulation and can be found here.
For questions on how these provisions affect your particular transaction, please contact one of our real estate attorneys by dialing at 239-344-1100.