It's The Law
Condominium Sales Require Disclosure
I plan on selling my beach front condominium and understand there are mandatory disclosure requirements in connection with my sale. Can you explain?
Florida's legislature apparently believes that residential real estate buyers need lots of statutory protection. Nowhere is that belief more evident than in contracts for purchase of a residential condominium.
All developers are required by statute to provide a packet of materials to prospective purchasers that have been approved by the State. But the statutes do not stop there. Resales of residential condominiums also have mandatory disclosures.
Section 503(2) of the Condominium Act sets out the requirements for non-developer disclosure in connection with sale of a residential condominium. It provides that each prospective purchaser who has entered a contract for 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, most recent available year-end financial statement, the document entitled "Frequently Asked Questions and Answers" ("Q&A Sheet"), and copy of a governance form.
The Condominium Act does not require automatic provision of the documents. It requires provision of the documents to a buyer upon request of a buyer. The statute provides the buyer with the right to cancel the contract for three days, excluding Saturdays, Sundays and legal holidays, after the effective date of the contract and buyer's receipt of the condominium documents. To shorten the "buyer's option", the seller should get the condominium documents into the buyer's hands as soon as possible.
Diligent Realtors often get a set of condominium documents from a title company, give them to the prospective buyer, and think their job is done. Some later find their conclusion erroneous. The packet of documents from the title company is often limited to those documents available in the public records. That means the documents have been recorded with the Clerk of Courts. Recorded condominium documents almost never include financial statements, the Q & A sheet or the governance form. It is also unusual to find the current rules of the condominium in the public records. Since the buyer's three-day right of rescission runs from date the buyer receives all of the required documents, the buyers in these cases have a continuing option to terminate until they close on the purchase.
Waiver is not an option. The statute prohibits waiving the disclosure requirements, other than by closing. That places a premium on careful review of the documents obtained from any source to be sure they are complete.
In addition to careful review, sellers should get the buyer to confirm in writing that the buyer has received all of the required documents. Even if the buyer later finds that the buyer has not received all of the documents, the buyer will be bound by the written acknowledgement. This has been reaffirmed by numerous Florida court decisions.
Delivery of the documents to an agent for the buyer will not generally be effective. That means, delivery to the buyer's attorney, title company, or even the realtor working with the buyer will not suffice. That means it is also important to be sure these documents are delivered to the buyer.
The statute also mandates that contracts for non-developer sale of residential condominium units contain specific language in conspicuous type advising the buyer of the buyer's right to condominium documents and the buyer's right to cancel the contract. If the contract does not contain the required warnings, it is voidable at option of the buyer at any time.
Florida's Condominium Act contains significant disclosure requirements for residential condominium sales. For that reason, you are well advised to retain an experienced attorney to insure your contract complies with the statutes and the disclosure requirements are met.
By: William G. Morris, Esquire
William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.
Questions for this column can be sent to: William G. Morris, e-mail: email@example.com or by fax, (239) 642-0722 or
The Marco Island Eagle
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