5 Things Every Florida Condo Buyer Must Know
With the after-the-crash recovery still in full swing in South Florida, Florida’s condominium associations are also in recovery from financial shortages, foreclosures and lawsuits. Condo buyers can protect themselves by making sure the following critical bases are covered during the condo association due diligence process:
#1 Absolutely, positively make sure your contract has a Condominium Addendum. This addendum details parking and storage space information, maintenance amounts, your seller’s account balance and special assessments. Many sellers do not disclose special assessments either intentionally or unintentionally, and the buyer must take the full responsibility of finding out these issues before the closing. The Condominium Disclosure is the apex of all condo disclosures, but this form is not often utilized.
#2 Caffeine up and make sure to read your condominium documents. Documents that are “must reads” include the Articles of Incorporation, Declaration of Condominium, Bylaws, Amendments, FAQ and the Budget. Though these documents are lengthy, they outline the rules and procedures the buyer will abide by when purchasing a unit e.g. leasing the unit, running an AirBNB, trash policies or displaying your favorite country’s flag on your balcony. See sample condominium documents here.
#3 Ask the Association Manager whether the Association has lawsuits in which they are either a plaintiff or a defendant Why ask about being the plaintiff (the party doing the suing)? Because other than for litigating for association past dues against an owner, condo associations often initiate litigation against their builder for building defects or other property related issues. In addition, a lawsuit may eventually result in a legal fees or a special assessment and come full circle and be charged to the owners if they lose the lawsuit.
#4 Ask for a copy of the “Condo Estoppel Letter” prior to closing. Way prior to closing: This letter is ordered by the title company or closing attorney and comes directly from the Association Manager. It provides information on maintenance fees and current owner account balances. It also informs the buyer whether any special assessments are in effect or anticipated in the future. See our sample estoppel letter.
#5 – Make sure your closing documents include an “Assignment of Parking Space” signed by seller and buyer. This restates by the seller what parking and/or storage spaces are being assigned. See sample assignment of parking space.
With the support of the listing, selling agent and the title company/attorney, buyers can be provided the best available information for their decision making process.
Need assistance reviewing your condominium documents or your contract? Please contact us at 305-305-271-0100 or [email protected] for a complimentary contract review.
Disclaimer: The Closing Company, Inc. is not a law firm and is not providing legal or tax advice in this publication. For legal advice, please consult with a licensed Attorney. For tax advice, consult with a Certified Public Accountant.
