Florida Condominiums and Buying Right
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:
- 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.
- Articles on Incorporation of the Association – Filed with Florida Department of State, this document authorizes the creation of the condominium association.
- Bylaws of the Association – The bylaws are the guidelines for the association’s operation.
- 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.
- 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.