Condo Budget Florida LAw

Disclosure of Budget & Fees By Management Company

Today, for the umpteenth time I went round-and-round with a property management company about fees. Some management companies put up websites with info on it thinking that they have covered their own bases and they’re good to go. this particular company only had the application for the purchase hosted online.  The brush their hands and make it easier for themselves but the problem is that they don’t understand real estate law in Florida or what is needed to protect the current condo owner and even future condo owner through the sale and purchase. 

This is important information for both condo buyer and condo sellers especially if they are buying or selling for sale by owner because this is where you will get the information.  You don’t know what you don’t know so consider this.

Florida real estate law reads that whether you’re buying an inexpensive resale in Bermuda Ridge or a resale  high rise penthouse in Tavira at Bonita Bay a condo buyer is legally entitle three days to review the condominium association budget, frequently asked questions (FAQ), rules and regulations and also they need to get a current application to join the association and the association bylaws, articles of incorporation.  If a condo buyer does not receive those items they are legally able to cancel their contract.  That is how the seller is protected through the transaction, by not losing their contract over a technicality.

So, recently I had to make over a half dozen phone calls and just as many emails before I finally got to someone at a professional management company to send me the documents.  The manager is opening the emails (I have a tracking program) but not responding.   I don’t think they understood that in addition to the law there are other items we need to disclose to buyer that actually go in the MLS up front.  I ended up finding someone higher up to get this information:

1. Transfer fees. There are often capital contributions due to the association by the buyer. At the closing time is not the place to find out that there is a couple thousand dollars due.

2.  Quarterly condo fee.  The fee is verified in the budget. Sometimes the owners are wrong and I, as an experienced real estate professional, trust but verify.  Especially at the first of the year when the budget for the year gets changed and released.

3. Master HOA fees.  Sometimes there are more than one fee due from the owner; the quarterly condo fee and the master HOA fee.

4. Special assessments and lawsuits are often disclosed in the FAQ’s.  Every buyer has a right to know if there is a lawsuit (which could effect financing a buyer) or a special assessment to make up a shortfall in the budget or for a major repair.

5.  Reserves for replacement.  An alarmingly  low amount of reserves can be a tip that a condo may not qualify for traditional financing programs.

There really is no reason for this info to not be readily available in a .PDF to email to a real estate agent or potential buyer.  I check the MLS to see how many sales occurred in the complex I have been trying to get the info for.  Forty-two properties have have closed sale in the last year.  That means forty-two times that the manager was annoyed at real estate listing agents and purposefully unavailable to produce the documentation instead of just popping it off in a .PDF. The manager probably just things that real estate agents are pesky and annoying when they could, in fact, stream line what is need and happened forty-two times within the last year.  It’s probably going to happen 42 times next year, too.

This situation isn’t limited to professional management companies. There are some condo associations managed by the residents who get weirded out by handing over the financials. Look, we don’t want bank account numbers, we need to produce the fiscal information to prospective buyers and their lenders (if the buyer is financing) by law.  If you were buyer  you would sure as heck want to know.

Special thanks to those CAM’s and management companies who get it right and know that most of this info can be handled in one interaction, in an email so that every aspect of the transaction goes smoothly from contract through close.