Florida offers residential purchasers a wide variety of options. Residences
with amenities managed by an association are popular as they often provide
something extra in the form of pool, tennis courts, golf, clubhouse, social
room and even a greater opportunity to commune with one’s neighbors.
Most residences within an association are subject to rules enforced by
the association and assessments. For those reasons, Florida’s legislature
mandates disclosure to buyers of property within such associations. The
purpose of the disclosure is to make sure a buyer understands that buying
into a property within an association brings with it what could be hidden
restrictions and expenses in addition to the open and obvious amenities.
Florida’s Condominium Act was the State’s first effort to mandate
disclosure. To help bring stability to condominium sales and comfort buyers
of this relatively new product in Florida, the state required developers
of new residential condominiums provide buyers with a prospectus including
substantial disclosure and mandatory contract provisions. Residential
purchasers from developers have 15 days to terminate a contract after
receiving all of the required information.
After some experience with developer disclosure, the legislature decided
it would be a good idea to also require disclosure on resale by non-developers.
Non-developer disclosure is much simpler and buyers only have 3 days to
terminate after they get all of the required disclosure. What does that
disclosure look like you ask?
Non-developer residential condominium sellers must meet the requirements
of Section 503 of Florida’s Condominium Act. That section requires
contracts include warning language in conspicuous type either:
- A clause which states: THE BUYER HEREBY ACKNOWLEDGES THAT BUYER HAS BEEN
PROVIDED A CURRENT COPY OF THE DECLARATION OF CONDOMINIUM, ARTICLES OF
INCORPORATION OF THE ASSOCIATION, BYLAWS AND RULES OF THE ASSOCIATION,
AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY
ASKED QUESTIONS AND ANSWERS DOCUMENT MORE THAN 3 DAYS, EXCLUDING SATURDAYS,
SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO EXECUTION OF THIS CONTRACT; or
- A clause which states: THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING
WRITTEN NOTICE OF THE BUYER’S INTENTION TO CANCEL WITHIN 3 DAYS,
EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION
OF THIS AGREEMENT BY THE BUYER AND RECEIPT BY BUYER OF A CURRENT COPY
OF THE DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION, BYLAWS AND
RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL
INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF SO
REQUESTED IN WRITING. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS
SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD
OF NOT MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS,
AFTER THE BUYER RECEIVES THE DECLARATION, ARTICLES OF INCORPORATION, BYLAWS
AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL
INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF REQUESTED
IN WRITING. BUYER’S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE
If the contract does not include the mandatory warning, it is voidable
at the option of the buyer prior to closing.
The mandatory disclosure cannot be waived by a buyer, other than by closing.
That makes it important a seller make sure the buyer gets all of the required
documents as soon as possible. Buyers have 3 days to terminate contract
and the time does not start until the buyer gets all of the required documents,
unless the buyer signs a receipt acknowledging all were received. Signing
that receipt is binding on the buyer, even if it is incorrect.
The mandatory disclosure requirements under the Condominium Act can be
used to terminate the contract any time a buyer decides not to buy. The
contract termination does not have to be related to disclosure documents.
Shortfall in providing documents, even inadvertent, makes the purchase
contract an option for the buyer.
Some condominium associations do not provide the most recent year-end financial
information. Instead, they provide the budget. Some do not provide all
amendments to the declaration of condominium, some fail to provide a complete
set of rules and a few fail to provide the form known as frequently asked
questions and answers. If the buyer’s attorney finds any of these
deficiencies, it is a ticket for the buyer to cancel, unless the buyer
signed a receipt acknowledging receipt of all required disclosure.
The legislature adopted an almost identical approach in the Florida Cooperative
Act. The difference between a co-op and a condominium is in the nature
of ownership. In a co-op, the owner buys shareholder stock in the cooperative
which allows the owner exclusive right to occupy a portion of the cooperative
property. One’s interest in a co-op can be separately mortgaged
and is eligible for homestead tax benefits, but there is some question
about whether co-ops qualify for other homestead benefits.
Mandatory disclosure in resale of a co-op is limited to articles of incorporation,
bylaws and question and answer sheet. A co-op buyer has the same 3 days
to terminate as do buyers of a condominium.
Homeowners associations are a different animal. They are addressed in their
own set of statutes under Florida’s Homeowners Association Act.
The legislature did not require disclosure for residential property within
a homeowners association until 20 years after mandating disclosure for
condominiums and co-ops. When the legislature did mandate disclosure,
it made no difference between developers and resales.
Mandatory disclosure for sellers in a homeowners association must be in
a disclosure summary form substantially similar to one promulgated by
statute and is limited to disclosing assessments and applicable fees for
rent or land use fees of recreation or commonly used facilities. Contracts
for property within a homeowners association must include warning language
that the buyer is entitled to the disclosure summary and has 3 days after
receipt of the summary to terminate the contract. If the disclosure summary
is provided before buyer signs the contract, the buyer does not have a
Mistakes or omissions when providing mandatory disclosure can mean the
buyer’s 3 days to terminate never starts or ends. The biggest mistake
in homeowners association disclosure is made by adding non- association
expenses to the disclosure form to give a buyer even more information.
In that case, the good deed does not go unpunished. Including anything
on the disclosure other than assessments for the particular association
The legislature has made a sincere effort to make sure buyers get information
to help their buying decision in residential condominiums, co-ops and
homeowners associations. The disclosures serve that purpose well, but
when mistakes are made in meeting the disclosure requirements, the mistakes
can allow a buyer to terminate a contract. That means sellers should take
an active role in making sure complete and correct disclosure is provided
to residential buyers of these properties. Otherwise, the buyer has an
option to terminate all the way to closing.
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.