Understanding Condominium Ownership In Florida

December 22nd, 2006 categories: Tampa Condos, Tampa Real Estate, Tampa Realtor

I find that many condo buyers, whether they are first timers or not, often do not understand the differences in condominium ownership as compared to fee simple ownership. The two types are quite different and prospective buyers of condominiums should fully understand the issues involved in ownership.

The word condominium is a combination of Latin words meaning together (con) property (dominium). Owners of condos own only the individual unit (horizontal and vertical space) in fee simple along with joint ownership of the common elements of the property. The legal description of the real property will usually state the percentage of common elements owned: HYDE PARK PLACE II A CONDOMINIUM UNIT 329 AND AN UNDIV 0.8818% INT IN COMMON ELEMENTS, or CULBREATH KEY BAYSIDE CONDOMINIUM UNIT 106 BLDG 8 AND UNDIV INT IN COMMON ELEMENTS.

By comparison most townhomes and single family homes are owned in fee simple, meaning that the building, along with the land is owned individually. Owners in fee simple are responsible for their own insurance, grounds maintenance, roof replacement, etc.

Condominium owners are members of a condo association that governs the owners. Members pay fees to the association to cover insurance of the building, grounds maintenance, trash removal and reserves. Reserves are funds that are set aside to pay for future projects such as painting and roof replacement. If reserves are not adequate, members may be assessed a fee to pay for projects that the reserve funds could not cover.

When a buyer enters into an agreement to purchase a condo in the state of Florida, a seller has to provide a set of documents which are most often referred to as the “condo docs”. The buyer then has a period in which to inspect these documents. For new condos, the period is 15 days and for resale condos, 3 days. The “condo docs” are made up of 4 separate documents, all of which need to be provided by the seller, at the seller’s cost. These documents include:

1. Declaration of Condominium
2. Articles of Incorporation for the association
3. Bylaws and rules of the association
4. Same year-end financial information provided to owners the previous year

After reviewing these documents a buyer may cancel the contract within the alloted time period and receive a full refund of any and all deposits. Why would a buyer cancel? Some buyers may find the rules of a particular association to be to restrictive. Maybe the pet policy or the policy regarding leasing the unit raises a red flag. Maybe after reviewing the financial information, it is clear that the association management is not effective. Prospective buyers should learn as much as possible about the association before signing an agreement to purchase if at all possible.

Most condo associations now post their documents online at sites such as CondoCerts.com so that they are easily retrieved by prospective buyers.

Condominium living has many advantages such as:

• Low maintenance living
• Use of common amenities such as pools, fitness centers, tennis courts, etc.
• Security

But there are also the disadvantages such as:

• Control by the association and its board of directors
• Operating costs can exceed projections (assessments)
• Limited parking, limited space
• Common wall neighbors

Prospective buyers of Florida condominiums should fully understand the issues involved with condominium ownership and solicit information from residents, Realtors and each association and/or its management company.
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This entry was posted on Friday, December 22nd, 2006 at 7:08 pm and is filed under Tampa Condos, Tampa Real Estate, Tampa Realtor. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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One Response to “Understanding Condominium Ownership In Florida”

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