A condominium is a form of real
property consisting of condominium units and common
elements. Units are the parts of
the condominium property which are subject to exclusive
ownership. Common elements are
the portions of the condominium property not included in the
units. Proportionate ownership
of the common elements is an appurtenance to a unit, meaning
that it comes with the purchase
of a unit and cannot be divided from the unit. Each unit’s share
of ownership in the common
elements is the same proportion by which the unit owner will share
in the cost of operating the
condominium. The condominium form of ownership, usually
associated with high-rise
buildings, may also be found in garden-style apartment buildings, row
structures, semi-detached
structures, single-family homes, mobile home parks, and recreational
vehicle parks. A condominium may
be residential, commercial, or a mixture of both.
The Condominium Act provides
that an association, usually a not for profit corporation, is
responsible for operating the
condominium. The association’s responsibilities include
maintaining, repairing, and
protecting the land and the facilities in the condominium such as
swimming pools, tennis courts,
elevators, etc. The condominium association is run by a board
of directors, initially appointed by the developer,
but ultimately turned over to unit owner elected directors.
The declaration of
condominium is a document that describes the condominium property,
the
unit boundaries, the common
elements, and other improvements. Reading this document will
assist you to understand what
you will own when you purchase a condominium unit. A
purchaser usually obtains
ownership and exclusive possession of everything inside the
unfinished interior surfaces of
the walls, floors, and ceilings of the unit, including the interior
partitions, cabinets,
appliances, and fixtures. The land and structural parts of the building
are
usually common elements. The
declaration will also provide for the maintenance
responsibilities of the unit
owners and the association.
Condominium life requires that
you live in close proximity to your neighbors, abide by
restrictions on the use of your
unit and common elements, and that you be personally involved
in the operation of your
condominium association. In order to protect your investment, it is
important to attend meetings to
keep informed on the issues pertaining to the operation of the
condominium.
PART TWO: THE PURCHASE
Reservation Deposits
A reservation program allows a
developer to “test the market” in order to make a decision to
construct a condominium project.
Prior to construction, the developer may enter into a
reservation agreement with
prospective purchasers. The reservation agreement is not a binding
contract since it allows either
the developer or the purchaser to back out at any time. The
developer is not required to
construct the property. Any reservation deposit must be fully
refunded upon the written
request of the purchaser or the developer.
Sales Deposits
If you are purchasing a
condominium unit in which the construction, furnishing, or landscaping
of the property is not
substantially complete, The Condominium Act requires that deposits up to
10 percent of the sales price
must remain in an escrow account with an independent escrow
agent. Deposits in excess of 10
percent of the purchase price may be used in the actual
construction of the condominium,
if so provided by the purchase contract. For example, in
the sale of a condominium unit
priced at $100,000, only $10,000 of the sales deposit must
remain in the escrow account.
The remainder of the sales deposit may be used in the actual
construction of the property.
You should check your purchase contract to determine whether
your complete sales deposit is
protected.
Listed below are key condominium
documents, along with a brief explanation of what these
documents should address:
•
Declaration of
Condominium
The declaration of condominium
is one of the most important condominium documents
as it is the document that
creates the condominium (when it is recorded in the official
records of the county in which
the condominium is located). Some of the issues
addressed in the declaration
include: membership and voting rights of unit owners; the
manner of sharing in the common
expenses, common surplus, and ownership of the
common elements; the maintenance
responsibilities of the association and of the unit
owners; identification of the
units; use restrictions; the manner in which alterations may
occur within the condominium;
insurance requirements of the association and of the unit
owners; rights of the developer
during the period of construction and the sale of units;
and procedures for amending the
declaration.
•
Articles of
Incorporation
The association’s articles of
incorporation address: the purpose of the articles, the
powers granted to the
association, the rights of members, the number of directors and
officers, an indemnification
clause for directors and officers, and procedures for
amending the articles.
•
Bylaws
The association bylaws address
items such as: the type, frequency, and location of
meetings; meeting notice
requirements; powers and duties of the association; duties of
officers and directors;
procedures for amending the bylaws; use restrictions; financial
reporting and other pertinent
information.
•
Estimated Operating
Budget
Estimated Operating Budget
The estimated operating budget
provides detailed estimates of various common expenses
that are to be shared by the
unit owners. The budget also includes significant information
regarding future capital
expenditures and deferred maintenance projects such as: roof
replacement, building painting,
pavement resurfacing, and other future expenditures in
excess of $10,000.
•
Receipt for
Condominium Documents
Remember that your purchase
agreement with the developer may be cancelled up to 15
days after the date that the
purchase agreement is executed and the date you receive
the condominium documents,
whichever is later. The developer will ask you to sign a
receipt for condominium
documents. Be sure you have actually received all the documents
listed on the receipt. If you
are purchasing from a private party, you are entitled to copies of
the declaration of condominium,
the articles of incorporation, the bylaws and the most recent
financial reporting information,
at the seller’s expense.
•
Frequently Asked
Questions and Answers Sheet
This document provides a summary
of any leases or other covenants and restrictions,
affecting the operation of the
condominium and association.
Source Quote:
Department of Business and Professional Regulation
Division of Florida Condominiums, Timeshares,
and Mobile Homes
Questions?
Division of Florida Land Sales,
Condominium and Mobile
Northwood Centre
1940 North Monroe Street
Tallahassee, FL 32399-1030
(850) 488-1122
.
PLEASE VISIT OUR GENERAL INFORMATION PAGE BY
CLICKING HERE