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Florida’s legislature mandates non-developer sellers of residential condominiums provide certain condominium records to a prospective buyer if requested by the buyer under a contract to purchase the condominium unit. The buyer has to be under contract to have right to the records. Buyers of residential condominiums from non-developers can terminate the contract up to 3 days after receiving the mandatory disclosure. To help make sure buyers get the documents, the Condominium Act also mandates associations maintain sufficient copies of the mandated documents to ensure availability to unit owners and prospective purchasers.

The mandated disclosure includes declaration of condominium, articles of incorporation and bylaws of the association, rules, most recent year-end financial statement, the document titled “Frequently Asked Questions and Answers” (Q&A Sheet) and a governance form published by the State explaining condominium governance. Most buyers get a large package of documents soon after contract, as sellers and Realtors want the buyer’s 3-day right to terminate to start and end quickly. Unfortunately, the mandatory disclosure often does little to educate a buyer.

The package of documents provided a buyer often totals more than 100 pages making review a somewhat daunting task. Few buyers study the material, and those who do have only 3 days to complete the task. Almost no buyers ask an attorney to review. That can leave a buyer in same position as no disclosure at all.

Thorough review of these condominium documents can answer questions buyers should ask. The Q&A Sheet is the easiest and possibly most important to review. Florida law requires associations update the sheet annually. The Q & A Sheet includes restrictions on use of units, rental restrictions, amount of assessments and if the association is in court action in which the association might face liability of more than $100,000.

Pet restrictions can be found in the Q&A Sheet. How about parking? How many spaces for each unit? Can an owner have a motorcycle? A pickup truck? Boat and trailer? When a buyer counts the spaces reserved for units, how many are available for guests?

The Q&A sheet tells a buyer if the units in the condominium can be rented and, if so, how often and for what duration. That can be important to buyers who want to rent when they do not use the unit and those who do not want a lot of rentals in their building. The Q&A Sheet also tells the buyer current level of assessments. The Q&A Sheet does not warn the buyer of possible assessments for repairs or maintenance in the future. That has been particularly troublesome in some condominiums that did not have enough insurance and funds in reserve to pay for damage from hurricane Wilma.

Where in the mandatory disclosure would a buyer find possible future assessments? That is not easily done. The only place the buyer might get a feel for possible future assessments is to review the financial statement to confirm funds in the association’s reserve accounts. Statutes require condominium association budgets include reserve accounts for capital expenditures and deferred maintenance, including roof, paving and painting along with any item that will cost over $10,000. But, Florida law also allow members of an association to vote to maintain reserves at less than the amount required by statute (and even zero).

If reserve account balances are large, likelihood of a special assessment to pay for a new roof or painting may be small. But, how to tell? There is no mandatory disclosure of how much estimated time before repair is needed and what that cost might be. Estimated useful life of major components and what fully funding reserves would require is mandated for each annual proposed budget so owners can see what they pay unless they vote for reduced reserve funding. But neither final budgets or proposed budgets are part of the mandatory disclosure.

Condition of the building is not part of mandatory disclosure. There is no statute mandating associations inspect condition or obtain engineer reports ever. The closest is a statute mandating associations have an insurance appraisal at least every 3 years to make sure their hazard insurance is sufficient to repair or replace. That is a far cry from an engineering inspection of condition.

A diligent buyer might ask the manager or association president questions about the condominium. They do not have to answer. The Condominium Act states the association is not required to provide a buyer any information other than the mandatory disclosure documents. Can an owner get more information? You bet. But how to get the owner to provide?

The Condominium Act requires associations maintain a laundry list of records, including minutes of all meetings, contracts, accounting records, studies, contracts for work performed and bids, and a copy of plans provided by the developer. Minutes of board meetings should have a lot of information about pending assessments, condition of the building, insurance claims and even problems with owners or otherwise. The statutes mandate an association make these records available for review by an owner or the owner’s designated agent.

There is nothing stopping an owner from making a buyer or the buyer’s attorney a designated agent for records review. The owner could even make a prospective buyer a designated agent. The Condominium Act does not guarantee records will be made available, but does provide a penalty if records are not made available to an owner (or designated agent) within 10 days of written request. That is a lot longer than 3 days to terminate after getting the mandatory disclosure.

If a buyer wants to require seller cooperation getting records to review, the buyer might put that in the contract. If so, the buyer might also consider extending the deadline to terminate until after review of the additional records. In a hot market, a seller may be reluctant to agree to extend right to terminate. If a seller is likely to refuse extension, a buyer could try the association directly (usually unsuccessful), or ask the seller to get documents before contract. If no additional documents can be obtained, the buyer will have to decide if the buyer will rely on the mandatory disclosure alone.

Investigating a condominium prior to purchase can be difficult, but is important. At a minimum, buyer should carefully review the documents that must be provided by statute. If possible, getting more information should be pursued as well.

William G. Morris is the principal of William G. Morris, P.A. William G. Morris and his firm have represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, associations and real estate. The information in this column is general in nature and not intended as legal advice.