Generally, sellers are required to provide a real estate disclosure to disclose known information which is not known or otherwise readily observable by the buyer(s).
Sellers of homes governed by homeowners’ associations (HOAs) or condominium associations (COAs) in Florida have the additional responsibility of providing buyers with the appropriate addendum to disclose additional information about the association.
Failure to provide such disclose may afford prospective buyers the ability to cancel the sale.
Florida Rules for Providing a Condominium Disclosure
Florida HOA and COA laws recognize that rules and regulations of an association may not be attractive to all buyers. The HOA and COA disclosures ensure that any person buying a unit within a community is aware of all restrictions regarding the owner’s fees, uses, and rights associated with the property. If a buyer is provided with the relevant documentation and decides such restrictions are not acceptable, the respective addendums provide for a timeframe in which the buyer may cancel.
Such addendums generally include the following language:
- An acknowledgement by the buyer of receipt of the required association documents at least three days prior to signing of the contract.
- Or an acknowledgement that the buyer can void the contract if he or she gives written notice of intent to cancel the sale within three business days after receiving the required association documents.
Collect Condominium Documents Early to Ensure a Smooth Transaction
While sellers are only required to provide copies of the governing documents if a potential buyer requests them in writing, the failure to provide documentation may extend the buyer’s right to terminate the sale all the way through to the closing date—potentially causing the sale to fall through at the last minute.
For this reason, it's a good idea to provide copies of all association governing documents to the buyer as early as possible. Such documents should include the following:
- A current copy of the Declaration of Restrictive Covenants
- The association's Articles of Incorporation
- The association's By-Laws
- The association's Rules and Regulations
- A copy of the association's most recent year-end financial statement
- A Frequently Asked Questions document explaining the important details of condominium ownership, etc.
Although associations are required to maintain copies of all of the above documents, the seller and/or buyer may have difficulty obtaining the information in a timely manner. As such, the Seller should collect copies of these documents in advance of listing the property for sale.
It only takes one small mistake to restart the three-day clock on the buyer’s right of rescission, placing the entire sale in jeopardy. Our experienced Florida real estate attorneys can review all of your documents to ensure your closing process goes as smoothly as possible.
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