These days, there are some incredible bargains in Florida real estate… especially condominiums. Just before the downturn in the real estate market, condominium development in Florida was at near-record levels. Now, there is an abundance of new, unsold condominium units, many being sold for pennies on the dollar. A large percentage of these units are near beaches, golf courses and other amenities that make Florida living so desirable. For investors and second-home buyers, this creates an opportunity that may not come around for decades.
However, a condominium formed under Florida law, is a completely different animal than what you’ve been used to. It all starts with the ownership concept. First of all, most people refer to the apartment in which they will be living as their “condominium.” Actually, the condominium is the entire project consisting of all of the apartments, the grounds, the parking areas and, in most cases, the recreational facilities. Your apartment is referred to as a “unit.” All the rest of the condominium is known as the “common elements.” You have exclusive ownership of your unit and you share in the ownership of the common elements with all of the other unit owners. The Florida Condominium Act says that all of you have an undivided ownership in the common elements. This means every unit owner has the right to enjoy the common elements and the obligation to maintain them.
As you may guess, this arrangement, without guidelines and management, could lead to utter chaos. Each unit owner would assert his or her own personal and selfish preferences as to the use of the common elements and many would not want to pay their fair share of the expenses.
Because of the close proximity to your neighbors, the need to regulate the use of the common elements and the necessity of insuring, maintaining and repairing the common elements, certain rules and restrictions must exist. Pursuant to Florida law, these rules and restrictions are found in the condominium documents. A brief list of the documents is as follows:
- Declaration of Condominium. This is the main document of the condominium. The Declaration actually creates the condominium. It describes the units and common elements, defines certain unit owner rights, authorizes creation of the association and regulates the use and operation of the common elements.
- Articles of Incorporation of the Association. This document creates the condominium association. It is filed with the Florida Department of State.
- Bylaws of the Association. These are the guidelines for the operation of the association. The bylaws set forth the number of directors, prescribes the procedures of unit owner and board of directors meetings and defines the financial and budget matters of the association.
- Operating Budget. This document describes the common expenses of the association, which are divided among the unit owners in the same proportion as the ownership interest in the common elements.
- Rules and Regulations. These are enacted by the board of directors and generally consist of restrictions pertaining to the use of the common elements.
Purchasing a Condominium Unit
If you have decided that condominium life is right for you, you may wish to purchase a unit. The purchase of a condominium unit involves many of the same considerations as a single family home. However, because of the unique nature of condominiums, there are other factors to consider.
There are two circumstances in purchasing a condominium unit which are treated differently under the Florida Condominium Act. There are different requirements depending on whether you are purchasing from a developer or from the prior unit owner. This article will concentrate on purchasing from a Developer.