The market for homes and condominiums throughout the South Florida region is now thriving, and many of the area’s community associations are seeing more document requests from prospective buyers than ever before. Florida law mandates associations provide certain documents to prospective buyers, and several bills are now being considered by the state’s lawmakers to increase access to association financial and engineering records.
Florida law dictates that associations must provide prospective buyers with the community’s declaration, articles of incorporation, bylaws and any related amendments, as well as the rules of the association. They must also provide them with a Q&A/fact sheet covering voting rights, use and leasing restrictions, fees and assessments, and outstanding litigation with liabilities in excess of $100,000.
These documents may be provided in hardcopy or digital forms, but digital records are preferred and can be prepared for easy access via a shareable weblink. The records must also be made available for scanning, copying or photographing, so hardcopies should also be available for use as needed. Only the “actual cost” involved in preparing and providing the documents may be passed on to prospective buyers, so there should not be any costs for cases in which only digital access is requested and provided.
Access to additional records such as meeting minutes, reserve studies, engineering inspections, and other materials are at the discretion of the association. If such additional records are being provided, an association is entitled to charge a reasonable sum of up to $150 for their preparation and procurement.
Associations are also seeing many records requests from their unit owners, who often receive requests from prospective buyers for additional information and documentation. Florida law even requires sellers to provide prospective buyers with a “governance form” with information on the role of the board of directors, meetings and notices, maintenance requirements, special assessments, voting rights, and records requests.
In response to the horrific Champlain Towers tragedy, several condo-safety reform bills are now making their way through house and senate committees during the current legislative session in Tallahassee. Some of these include measures aimed at expanding access to association records for prospective buyers, and The Florida Bar condominium law life-safety task force recently recommended access to engineering inspection reports for such prospects as part of its suggested reforms.
South Florida community associations should expect to continue seeing increased records requests as the real estate market continues flourishing, and new amendments to the state’s laws mandating increased access to financial and engineering/maintenance records may also be in store. Plus, the last thing associations should do is to needlessly hold up sales contracts for unit owners over missing documents.
Association boards of directors and managers would be very well advised to consult with highly experienced association attorneys to develop a set process and protocol for all records requests from prospective buyers as well as member unit owners. Responding to these requests should become routine, and any questions or disputes involving specific requests should be immediately referred to association legal counsel for resolution.
Our firm’s association attorneys write about important matters such as these in this blog, and we encourage association directors, members and property managers to enter their email address in the subscription box on the right to automatically receive all our future articles.