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Listings with a Property Association? Get Ducks in a Row

Fla. has different types of property owners’ associations but they are governed by different laws. Sometimes the rules are the same; often they are not.

ORLANDO, Fla. – Many Florida properties are subject to various types of property owners’ associations. The main two types you’re likely familiar with are homeowners’ associations (HOAs) and condominium associations. While they’re both a type of property owner’s association, they’re not governed by the same laws. In fact, there are several major differences.

However, this article focuses on only one element within the different two statutes: The specific information that must be provided to the buyer. (It does not address developer disclosures, just non-developers, i.e. sellers.) It explains the information you need to gather, when you should get this information together and why it’s a good idea to start early!

Note: Legal Hotline calls often start out with the member referring to an HOA issue when they’re really referring to a condo association. It’s important to make sure you’re referring to the property type of association for the property. The laws are different, and calling the association by the wrong name can only lead to confusion.

Homeowners Associations (HOAs)

 As I noted earlier, there are differences between these two types of property owners’ associations. One of the biggest we hear about on Florida Realtors Legal Hotline centers on what information a buyer is entitled to receive if purchasing property in an HOA community.

Guess what? Purchasers of a property subject to an HOA aren’t entitled to receive the same things as a purchaser of property subject to a condo association. So let’s break down what a buyer should receive if purchasing property subject to a homeowners association.

Many callers assume that HOA buyers are entitled to all association documents. Unfortunately, current law doesn’t require a set list of items. Under HOA law, specifically Florida Statute 720.401, a buyer is entitled to what is called a “disclosure summary.” This summary provides various notices about the types of assessments the buyer may be subject to paying in the event the buyer purchases the property. There are blanks for the seller to complete with regards to assessments (i.e. monthly, annually), special assessments, and/or land use fees, if applicable.

Condominium associations

 Condo associations, however, do have a set list of documents that the buyer is entitled to receive at the seller’s expense. Pursuant to Florida Statute 718.503(2), “each prospective purchaser who has entered into a contract for the purchase of a condominium unit is entitled, at the seller’s expense, to a current copy of the declaration of condominium, articles of incorporation of the association, bylaws and rules of the association, financial information required by s. 718.111, and the document entitled “Frequently Asked Questions and Answers” required by s. 718.504.”

 Additionally, the prospective purchaser shall also be entitled to receive from the seller a copy of a governance form, which is available from the Division of Condominiums, Timeshares and Mobile Homes of the DBPR.

Things to note and best practices

 Notice I said above that this covers what buyer is entitled to receive, not what buyer may want to receive. The two Florida Realtors’ residential contracts have an HOA and condo rider/addendum that includes lines for additional information outside of that required by Chapter 718 and 720 of the Florida Statutes. The addendum includes, but is not limited to, applicable boat slip and parking spot info, as well as contact information for any management company for the association.

If you’re representing a buyer subject to some type of association oversight, it’s important to recognize the difference between the two statutes governing the types of property owners’ associations. Should a buyer want additional documents from the association, a buyer can certainly request this in his or her offer.

If you’re representing a buyer purchasing property subject to a condo association, stress the importance of reviewing the received documents carefully. A buyer will be subject to the condo association’s rules and regulations should they close on the property, and saying “I didn’t know that rule” likely won’t be a valid excuse if the information was in documents the buyer received before closing.

On the other hand, if you’re representing a seller of property subject to a property owner’s association, my advice is to start early. What do I mean? Don’t start gathering the information and documents your seller needs to give to the buyer once they’ve gone under contract. A savvy listing agent knows at the time they enter a listing agreement what documents/information needs to be gathered, and they’ll start the ball rolling then. Many associations have these documents available online and sellers have immediate access. Other associations may need additional time so, again, it’s best to start early and not wait to ask for the information.
Far too many calls to the Legal Hotline come from stressed agents, panicked that either their buyer hasn’t received any documents/information or their seller can’t get access to them in enough time. Don’t be in this position! At the risk of signing off in the same way I usually do, prepare in advance. Take potential issues off the table and get to closing as smoothly as possible.

Meredith Caruso is Associate General Counsel for Florida Realtors

Note: Advice deemed accurate on date of publication

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