Condominium and Homeowners’ Association Disclosures in Florida
By: Morgan Hila, Esq.
Did you know that Florida Law specifically protects a buyer purchasing a residence subject to a membership in a condominium or homeowners’ association, ensuring that all information pertaining to the transaction is made readily available for review? A real estate transaction that requires membership in a condominium or homeowners’ association triggers a number of statutory disclosure requirements. Buyers and sellers often overlook the extreme importance of these detailed and complete timely disclosures leading to potentially disastrous results, including, but not limited to the potential cancellation of the sale without recourse.
Seller’s Obligations & Buyers Recourse
Pursuant to Chapter 718 Section 503 of the Florida Statues, a residential contract for the sale of a condominium unit contains a nonwaivable provision that requires copies of certain documents to be furnished at the seller’s expense to the prospective buyer. The required documents include the bylaws and articles of incorporation for the condominium association, declaration of condominium and other documents specifically listed in Section 503 of Chapter 718 Florida Statutes.
Upon the receipt of the last required document, a three day right of rescission period begins. During this period, the buyer has the right to unilaterally terminate the purchase agreement simply by providing written notice of termination to the seller, after which the buyer will be refunded any deposit made as part of the purchase. Even if one of the documents is disclosed late into the contract period, the right will be triggered at the time when the disclosure is complete, which can be any point up until closing.
When purchasing a condominium from a developer, Florida Law requires all buyers are provided with a 15 business day rescission period. This period begins once the buyer has signed an acknowledgment form that they are in receipt of all condominium documents. Most developers are meticulous and provide buyers with a Condominium Prospectus upfront to avoid delaying the rescission period.
Similarly, Chapter 720 Section 401 of the Florida Statutes requires a seller to provide a corresponding homeowners’ association disclosure to a potential buyer. Both the developer sellers and nondeveloper sellers must provide a buyer with a disclosure form containing statutorily mandated language and information. Realtor form contracts include such language as a matter of course.
Due to the complex nature of the statutory notice requirements and the extensive list of disclosure obligations, it is imperative that a seller’s representative be well versed on these disclosure requirements. Requirements such as these can be problematic for even the most experienced real estate agents. Therefore it is imperative to have an experienced real estate attorney involved in the transaction to verify such requirements are met and protect the client’s best interest.
WWM&R team member Morgan Hila, Esq., practices in the areas of commercial and residential real property transactions, construction, corporate and commercial lending.