Buying, selling, or renting in a Florida condominium or HOA community involves more than a real estate transaction. Buyers, sellers, landlords, and tenants should understand association governing documents, transfer fees, rental restrictions, approval requirements, and security deposit policies before completing a transaction in a community association.
Communities with associations come with many advantages, and the particulars of buying/selling or renting in such enclaves should not come as a surprise for anyone.
Key Takeaways:
- Florida condominium buyers receive important statutory disclosure protections.
- Governing documents may include restrictions on rentals, pets, parking, and noise.
- Condominium and HOA transfer fees are regulated differently under Florida law.
- Associations may require tenant screening and security deposits.
- Buyers and renters should carefully review community restrictions before closing or leasing.
What Documents Should Buyers Review Before Purchasing in an Association Community?
In accordance with Florida law, buyers of a condominium unit have a statutory right to cancel their transaction within the applicable recission period after executing a contract and receiving a current copy of the condominium community’s governing documents. These will include the declaration of condominium, articles of incorporation, bylaws, rules of the association, most recent annual financial information, and a frequently asked questions and answers document.
Buyers of newly built condominium units should also understand the disclosure requirements that apply to new development purchases.
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What Types of Community Restrictions Should Buyers Understand?
The documents for condominium and homeowners association communities may list HOA rental restrictions regarding pets, vehicles, parking, rentals, noise, and many other issues. The broker/agent or salesperson should advise the buyer to consult with experienced association legal counsel to review the documents and discuss the potential impact of any restrictions on their plans for the property.
How Do Transfer Fees Differ Between Condominium and HOA Communities?
Florida law allows a condominium association to charge transfer-related fees for the sale, mortgage, lease, sublease, or other transfer of a unit only if the association has the authority to approve such transfer, and the fee is expressly included in the governing declaration, articles or bylaws. The fee may not exceed $150 per applicant other than the husband/wife or parent/dependent child, which are considered one applicant. Such fees are to be used for screening and transfer approval, and not for capital contributions.
Homeowners associations do not have this restriction. Many developers charge a one-time capital contribution when the builder sells a residence to its initial buyer. In some cases, these funds are set aside and delivered to the HOA at turnover to provide the community with start-up funds.
After turnover from the developer, the HOA that is then controlled by the unit-owner members may be able to continue to charge a capital contribution fee on resales. The amount of such a fee is then regulated by the association’s documents, which the unit-owner members can amend to adjust.
Can Associations Charge Screening Fees and Security Deposits?
Associations may charge a fee for the screening of rental tenants if such provisions are contained in their governing documents.
Florida community associations may also collect a security deposit from a prospective tenant if their governing documents so stipulate. Such security deposits protect the association’s common elements and areas from any potential future damage caused by the tenant, and they are capped at one month’s rent for condominium associations but there is no cap for HOAs (other than the reasonableness standard).
These and other measures stipulated under Florida law as well as most governing documents are designed to provide uniform community association disclosures and reasonable fees for all those who are buying, selling or renting in communities with associations.
This article was originally published in the Siegfried Rivera blog. Click here to read it on the firm's website.
Christyne D. Santisteban joined Siegfried Rivera in 2020 and concentrates her practice in community association law, bringing a wealth of knowledge and experience to her clients. With over a decade of experience in the community association field, she is a seasoned attorney who specializes in representing associations and providing invaluable legal counsel.