Here in Florida, there is a requirement with each transfer of property to provide a new purchaser with a copy of the condo rules to review prior to being bound by a contract. This requirement is actually a great policy in place to protect purchasers but few condo buyers are actually take the time to review the condo rules thoroughly prior to moving forward on their purchase. The condo rules are binding on you a purchaser within a condominium and the deed of conveyance binds you to these bylaws. While the condo rules are binding on you, they may not be binding on the local municipality.
The following is a story of a purchaser that we recently heard about who purchased a commercial condo in a converted condominium tower. At the top of the real estate market many apartment complexes were being purchased and converted into condominiums. This means that the building or rental complex was owned by one owner. An investor or developer would purchase the apartment complex and change the ownership structure to condominium. They would do this by filing a Declaration of Condominium which outlines all the new condo rules that would govern the property. Once approved by the state, they could sell the units individually to homeowners or investors. The idea was that they would buy in bulk and sell the units individually to make a profit.
When these Condominiums mostly in Florida were converted, the developers would draft the condominium documents which outlined the condo rules but also created various limited common elements or commercial condo units within the association. The units were marked as commercial condominiums and approved by the state and recorded in the declaration bylaws. In the specific story that we just heard about, the purchaser bought the commercial space with the intent to rent them out as office spaces. The condo rules clearly outlined that the use that he wanted was allowed and that the association had no control or ability to restrict the use of the commercial condos. What the owner did not check was the local municipality zoning rules.
When the purchaser took the condo rules downtown to get a certificate of use, they stated that the zoning for that particular area where the building was located did not permit commercial use. The unit that the purchaser had bought was essentially unable to be occupied commercially. The owner had checked the condo rules and the condo declaration but had not thought about checking with the local zoning. In summary the purchaser was able to speak with the municipality and explain that the space had always been used commercially and clearly was for this purpose and that the occupants were not causing any nuisance to any of the neighbors or the association and they granted permission to use the space for such but it was quite a surprise to the purchaser to find out what he thought the developer had properly established through recording of the Declaration of Condominium and creating of the condo rules, was not actually done.
In summary, its important to review the condo rules at contract time, but its also important to check the local zoning and regulations within your local municipality or city to make sure your intended use is acceptable.
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