What are the pre-construction condominium documents?August 12, 2019
A developer is required to provide purchasers a PROSPECTUS if the condominium consists of more than 20 residential units, or is part of a group of residential condominiums which will be served by the property to be used in common by unit owners of more than 20 units. The prospectus summarizes some of the major points detailed in the condominium documents.
Prospectus documents include the declaration of condominium, articles of incorporation of the association, bylaws of the association, frequently asked questions and answers sheet and additional items. The developer is required to file these documents with the Division of Florida Condominiums, Timeshares, and Mobile Homes, prior to offering units for sale
• Declaration of Condominium
The declaration of condominium is one of the most important condominium documents as it is the document that creates the condominium (when it is recorded in the official records of the county in which the condominium is located). Some of the issues addressed in the declaration include: membership and voting rights of unit owners; the manner of sharing in the common expenses, common surplus, and ownership of the common elements; the maintenance responsibilities of the association and of the unit owners; identification of the units; use restrictions; the manner in which alterations may occur within the condominium; insurance requirements of the association and of the unit owners; rights of the developer during the period of construction and the sale of units; and procedures for amending the declaration.
• Articles of Incorporation
The association’s articles of incorporation address: the purpose of the articles, the powers granted to the association, the rights of members, the number of directors and officers, an indemnification clause for directors and officers, and procedures for amending the articles.
The association bylaws address items such as the type, frequency, and location of meetings; meeting notice requirements; powers and duties of the association; duties of officers and directors; procedures for amending the bylaws; use restrictions; financial reporting and other pertinent information.
• Estimated Operating Budget
The estimated operating budget provides detailed estimates of various common expenses that are to be shared by the unit owners. The budget also includes significant information regarding future capital expenditures and deferred maintenance projects such as roof replacement, building painting, pavement resurfacing, and other future expenditures in excess of $10,000.
• Frequently Asked Questions and Answers Sheet
This document provides a summary of any leases or other covenants and restrictions, affecting the operation of the condominium and association.
• Additional items in pre-construction condo documents package
– Form of Purchase Agreement
– Escrow Agreement
– Evidence of Ownership
– Floor Plans
– Receipt for Condominium Documents (will talk more about it in my next post)
– Remembering Bill of Rights
– Alternative Media Disclosure
The developer is required to give each purchaser a complete set of these condominium documents. Once the buyer signs a purchase agreement and receives the documents from the developer, he has 15 days in which to cancel the purchase.