Florida Condominiums Top Tips to Make an Intelligent Investment

Florida Condominiums and Buying Right

Florida Condominiums

Key West Style Florida Condominiums

 

Experiencing a steep growth curve prior to the economic downturn, the Florida real estate market is a vibrating hub of abundant unsold and new condominium units. This is an once-in-a-lifetime opportunity for second-home buyers as well as investors interested to grab a piece of the endlessly desirable Florida condominium realty pie. With a large number of these condominiums being located near lush golf courses, sunny beaches, and providing world-class amenities, buyers have been flocking to this part of the world. Recently prices of Florida Condominiums have been back on the rise.  Don’t be in such a rush though you forget to do your due diligence.  Purchasing a condominium under Florida laws and regulation is an entirely different ball game compared to what you have experienced so far!

 

Condominium and Units

Starting with the definition of condominium for first time condominium buyers in Florida.  What exactly does the term ‘condominium’ stand for? Though most owners refer to their individual apartments as ‘condominium’, in reality, condominium denotes the entire property consisting of all the apartments, parking areas, grounds, and generally, the recreational facilities incorporated there. Each apartment is known as a ‘unit’. Other than the unit, the rest of the property is referred as ‘common elements’. The buyer has the exclusive ownership of the unit and the ownership of the common elements is shared with other unit owners. The Florida Condominiums Act highlights that all the owners have an undivided ownership of the common elements.

Condominium Documents and Its Importance

This ‘unit’ arrangement could lead to absolute chaos unless there are strict management and guidelines in place. Due to this close proximity with your neighbors and the potential chances of miscommunication regarding the common elements, there are condominium documents highlighting restrictions and rules that cover different concern areas including maintaining, repairing, and insuring the common elements. These documents briefly incorporate the following:

  1. Declaration of Condominium – The key document of your ownership of Florida condominiums. Describing the common elements and the units, this document defines the precise rights of the unit owner, authorizes formation of association, and controls the operation and uses of all common elements.
  2. Articles on Incorporation of the Association – Filed with Florida Department of State, this document authorizes the creation of the condominium association.
  3. Bylaws of the Association – The bylaws are the guidelines for the association’s operation.
  4. Operating Budget – It describes the association’s common expenses. The cost is split among unit owners in proportion to their ownership interest in all the common elements and changes year to year.  We always recommend you request a current budget from the HOA directly when purchasing.
  5. Rules and Regulations – Consisting of restrictions concerning the use of the common elements, these rules are ratified by the Board of Directors.

Investment and Purchase of a Condominium Unit

Though the purchase of Florida condominiums involves many considerations like a  single family homes, different factors are involved because of unique legal structure of condominium real estate. Under the Florida Condominiums Act, the two categories of the condominium purchase process are purchasing directly from the developer or from any prior unit owner. Under the Act, these two procedures are differently treated and there are different legalities involved. If you are eager to accept the Florida condominium life and planning to invest in a unit, prior research of these criteria is important.  Once you purchase its too late to do your due diligence.

 

What Is Condo Receivership and What Does It Mean as a Homeowner?

What exactly is Condo Receivership anyhow?

Florida Condo Receivership

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As a condo owner or someone who is considering purchasing a condo, the term “receivership” is something that you should be very familiar with. It’s important to understand what Condo Receivership is and why it happens, as well as what you should do about it.

What is Condo Receivership?

Condo Receivership is a term applied when an entity, court or individual has been appointed to take over the management of a condo. This might include things like paying the bills for the condo, collecting income, scheduling repairs and other important administrative tasks. Typically, the receiver would be acting as the board of directors to ensure that everything with the condo gets taken care of.

Why Does This Happen?

There are a few different reasons why a building or association might be placed in condo receivership. One of those is that there aren’t enough people to act on the board and affairs aren’t being taken care of. If the members aren’t able to elect or appoint a board, the owner of the condos can ask the court to appoint a receiver to ensure that the condo is being taken care of properly. Different states have different laws regarding receivership. For instance, in Michigan, receivers can be appointed to take over when the condo owners are delinquent in assessments.  In Florida we are seeing it more and more often.  There are scores of Florida Condominium Associations now being run by Condo Receiverships.  As more and more condo owners are falling behind in condominium dues and delinquencies on the rise, more and more associations are finding themselves being run by court appointed receiverships.

When Warring Factions Can’t Agree

There are some situations in which a condo can be placed in condo receivership because warring factions aren’t able to agree on who is running the association or how it should operate. In a case like this, it’s important for the condo to be taken care of and since no one can determine who should be doing that, the court will do so by placing it in receivership.  While this may appear like a mutual third party to assist in affairs, the costs to homeowners can be a burden resulting in potential condominium assessments on the few remaining condo owners currently paying dues.

The Cost for Receivership

One of the issues with condo receivership is that the receiver can come at a hefty price. When courts place someone in receivership, they tend to go with larger companies that are accustomed to receiving troubled companies that they must manage. The problem is that those receivers must be paid and they’re typically expensive (they can cost $150 to $300 an hour) and they’re not necessarily most concerned with what might be best for the condo community. The issue is that a receiver typically doesn’t know the community the way others might, and might not really have a clue what they’ve been appointed to care for.

What to Do

If your condo is placed in condo receivership, there are a few different things you may have to worry about. There’s a chance you could end up paying higher dues, or that the maintenance needed on the condo will be deferred, etc. You should speak with the homeowners association or the board as well as the individual or company that has been appointed as receiver to find out as much information as possible. You may also want to contact a qualified real estate agent or real estate attorney to ask questions that you may not understand.  Hiding doesn’t make it get better.  Educate yourself and make sure you ask questions.

Overall, it’s important to understand condo receivership and how it’s going to affect you. If you’re not sure how to proceed, contact a qualified real estate agent  or real estate attorney in and inquire about what you should do next.  Look for condominium documents for your Condominium.  Search Now for your Condo Docs

Special thanks to Love And Pieces for the article recommendation.

 

Condo Bylaws & Condo Commandos

Condo Bylaws

Condo Rules and Regulations

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Whether you’re considering moving into a condo or you’re serving on a condo board, you may have run into what many people refer to as a “condo commando.” These are the individuals who feel as if they create all the condo bylaws, and are often so intimidating that others don’t question their reign. By understanding condo commandos, you can see why they’re not always the best enforcer of the condo bylaws.

What Exactly is a Condo Commando?

Typically, this kind of person serves on the condo board and may even be the president of the board. They have a “know it all” attitude and really leave others feeling like they have no voice in important matters. It can be difficult to deal with these types of people, but it can be done.

While excellent and dedicated condo directors can make changes for the best and can lead with a shining example, there are some that simply want everything done his or her way. The problem with this is that condo boards are created for a reason. Condo buildings are typically multi-million dollar holdings and one person with a dictator desire could put it at risk. It’s important to deal with them and ensure that everyone on the board has an equal voice and opinion in important matters including amending and interpreting the condo bylaws.

Take Action but follow your Condo Bylaws

Whether you’re on the board or you’re an owner of a condo in the unit, it’s important to take action if a condo commando is trying to take over. You can be successful if others have issues with this person as well, and they see the potential damage the individual could inflict. One great way to deal with this type of person is to create a petition asking the condo commando to resign. If they should refuse to resign, then the board should be willing to back up their petition by forcing them out of his or her position of reign.  Make sure you are checking your condo bylaws to abide by them to a “T.”

If you don’t feel as though things are bad enough for a resignation, you can create a petition for them to hear your demands.  This could include you and other homeowners presenting a united front with the board once a decision has been voted on. It could include the demand that everyone has an equal opportunity to speak and to voice his or her opinion. Simply state the demands that you’ll require if this person is to remain in his or her position of power.

By taking control of an ugly situation in your Condominium Association quickly, you can ensure that minimal damage is done under his or her power all by abiding by the condo bylaws. It’s important that board members have equal say and that important issues involve everyone.

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