When buying a condo, it important to look beyond location, size, amenities, and price point of the condo to be purchased. Buyers should try to find out what about the inner workings of the condominium project and the way to start is by reviewing the declaration of condominium, i.e., the condo docs of the community of interest.
As a professional licensed Florida Community Association Manager, I had to continually refer to the Florida Condominium Act and the association’s declaration documents to address many issues that arose in the process of managing an association – regardless of the size. As such, I know how important the declaration of condominium can be in determining a community’s financial stability, resident’s quality of life and most importantly the preservation of property value.
In my opinion, reviewing an association’s declaration of condominium is as important as reviewing the contract in the process of purchasing a condominium, however, in Florida a buyer of a pre-owned condo has only three days to review the declaration of condominium. Why is that you ask? I do not know, but I have a serious issue with the procedure of purchasing a pre-owned condo as established in the Florida Condominium Act, particularly the part about the allotted time to review the condo documents (I will refer to the pertinent documents required by law as condo docs to included financial statements). For example, the Condominium Act requires a developer to provide a prospective buyer of a new condominium unit a copy of the condominium declaration (condo docs) and other documents after signing the purchase contract. Upon receipt of the condo docs, the buyer of a new unit has 15 days to review the documents and either commit to the offer and the terms of the contract or cancel the offer.
Similarly, the Act requires that a buyer of a pre-owned unit receive a copy of the condo docs, except that the Act allows two approaches for a non-developer seller of a unit to provide a copy of the documents to the buyer. The first approach allows the seller to provide a copy of the condo docs more than three business days before the signing of the contract. In this approach, if the buyer acknowledges receipt of the documents three or more business days before the signing of the contract, the buyer is bound to the contract upon its execution. The second approach allows the seller to provide the condo docs after the buyer signs the contract. In this situation, the buyer has only three business days after acknowledging receipt of the condo docs to cancel the contract. Note: The first approach is rarely made, if at all.
In either case, whether buying a new or pre-owned unit, the buyer does not have to give a reason for canceling or find fault in the document to rescind the contract. Furthermore, a buyer can withdraw from the contract at any time before closing on a unit if the developer or a non-developer seller fails to provide a copy of the condo docs to the prospective buyer.
I take issue with the fact that although the Act provides for two approaches to getting the condo docs in the hands of a prospective buyer, in practice, only the second approach is regularly available. In other words, from a practical standpoint, the first approach is not likely to occur because a non-developer seller will not make their condo docs readily available to any prospective buyer for the asking. As such, the second approach does not provide sufficient time for a buyer to thoroughly read through the documents which will contain the pertinent and detailed information as to the rights, responsibilities, and obligation of the parties involved – not only in the purchase of the unit, but also in the ongoing administration, maintenance, and operation of the condominium project. The parties, in this case, is the prospective buyer/owner and the condominium association.
It’s clear from the contractual cancellation privilege granted to the buyers that the legislators realize the value and importance of a buyer having the opportunity to review the condo docs before committing to the purchase of a unit. As an experienced condominium association manager and realtor, I, too, recognize the importance of reviewing the condo docs. That’s to say, for the buyer to know what he or she is getting into before buying a condominium, and I also agree that a buyer should be given the absolute right to terminate a contract based solely on how they feel about the contents of the condo docs. So, by now, you’re probably wondering what’s my beef with the process of purchasing a pre-owned condo. I’ll tell you.
Therefore, if reviewing the condo docs is so important, why should a buyer of a pre-owned condo have only three (business) days to review such important documents. Three days is not enough time to review much less read a document, which is, on average about 150 pages, at a time when the buyer has to comply with several other time-sensitive issues during the contractual due diligence process, e.g., getting approved for a mortgage.