Condominium living offers many benefits that appeal to increasing numbers of individuals and families. The benefits of
this form of home ownership include an economical solution to constantly rising land values, building costs, maintenance expenses,
and provide unit owners with an opportunity to enjoy commonly owned recreational and other facilities that might otherwise
Condominium ownership is a concept that has existed in Florida
since 1963. Condominium purchasers and owners are often not familiar with the complex legal requirements. This booklet is
intended to acquaint unit owners and prospective buyers with the basic concepts of condominium ownership. Part I describes
condominium ownership and operation and focuses on the individual's role in the condominium. Part II highlights unit owner
protections under Florida law, and Part III outlines the functions of the Division of Florida Condominiums, Timeshares, and
Condominium Ownership & Operation
A condominium is a form of real property ownership in which an individual owns a unit exclusively and owns common elements
jointly with all other unit owners in the condominium. Condominiums come in many sizes, shapes, and forms. Condominiums may
be created at the time of initial construction or by converting previously existing apartments, townhouses, and hotels/motels
to the condominium form of ownership. Other examples of condominiums include mobile home sites, recreational vehicle sites,
boat docks, and office parks. Chapter 718 of the Florida Statutes, commonly known as the Condominium Act, and the corresponding
administrative rules found in Chapters 61B-15 through 61B-24, Florida Administrative Code, are the basis for the information
in this brochure and apply only to the condominium form of ownership.
Common elements are those portions of the condominium
property which are not included in the units. All unit owners share ownership of the common elements in an undivided manner.
The structure of the building including the roof, walls, conduit and hallways, and recreation facilities are examples of items
that are usually part of the common elements. Common elements are legally attached to each unit and are transferred with the
unit when it is sold. Therefore, a deed to a unit conveys the unit to a purchaser together with its proportionate ownership
interest in the common elements.
The development and creation of a condominium is a technical and possibly lengthy process.
In addition to business and construction considerations, a developer must also draft the condominium documents that at a minimum
include a declaration of condominium, articles of incorporation of the association, and the association's bylaws. The documents,
which must comply with the Condominium Act, contain restrictions on the use of the property as well as the mechanism and procedures
under which unit owners will eventually operate the condominium. Thus, the developer makes many important decisions relating
to the future operation of the condominium before any units are sold.
Operating a Condominium
The operation of a condominium is carried out through its association, usually a not-for-profit
corporation. Association members are those persons owning units in the condominium. The association manages and operates the
condominium community, maintains the common elements, and provides services in furtherance of its duties to the members. Each
purchaser, by accepting title to his or her unit, automatically becomes an association member, and is bound by the association
rules and regulations.
Condominiums are often compared to governmental entities. The condominium association has powers
and responsibilities that are similar to those of local governments. An association must establish a budget that addresses
the estimated operating expenses for the current period, set aside funds for future maintenance projects, collect assessments
to pay for the common expenses, and must enforce its rules and regulations. The association may also amend its documents relating
to the use, maintenance, and appearance of units and the common elements.
The Board of Directors
The board of directors, initially appointed by the developer and subsequently elected by the
unit owners, is responsible for managing the affairs of the association. The board may appoint committees to assist with the
various duties of the association. Often such committees include a Bylaws Committee, Budget Committee, and Grounds Committee.
Effective committees are important to a well-run condominium association because they help the board carry out its powers
A director is expected to carry out his or her powers and duties, as any other ordinarily prudent person
would do under reasonably similar circumstances. Directors have a fiduciary relationship with the unit owners, and have the
responsibility to act with the highest degree of good faith and to place the interests of the unit owners above the personal
interests of the directors.
Although the board of directors is essentially the decision-making body for the condominium,
the association's effectiveness rests primarily with its membership -- the unit owners. For an association to be successful,
unit owners must take an active part by serving in leadership positions on the board of directors and/or its committees, attending
association meetings, voting, and assisting in other affairs of the association whenever possible. These roles are essential
to an association's success. Apathy on the part of the unit owners will render an association ineffective.
owner has the right to be informed and have a voice in the operation of the condominium. For this reason, Chapter 718, Florida
Statutes, requires each condominium association to hold an annual meeting of its unit owners, provide adequate notice of meetings,
allow unit owner participation at meetings, conduct elections, permit unit owner inspection of the official records of the
association, and prepare and distribute a year-end financial report to the members. These are just some of the requirements
that unit owners can expect to be fulfilled by an association's board of directors.
The day-to-day management of the condominium property is one of the most important association functions.
While the documents provide an outline for orderly operation, real-life operation can be a vastly different experience. It
is the board's duty and responsibility to determine the association's needs, limited by the association's fiscal resources.
An association may be self-managed or hire professional management. Each association must determine the type of management
best suited to its unique needs, desires, and capabilities.
Although the Condominium Act does not require any condominium
association to do so, many condominium associations choose to contract with an outside individual or management company. However,
if an association chooses to hire a manager to assist the board of directors, that person may be required to be licensed as
a Community Association Manager, (CAM) under Part VIII, Chapter 468 of the Florida Statutes, known as the Community Association
Management Law. This law is administered by the Division of Professions. For information concerning licensure and regulation
of community association managers call (850) 487-1395. The hiring of a manager to administer the day-to-day operational functions
of an association does not relieve the board from the responsibility to ensure the association complies with the Condominium
Act and the Division's administrative rules.
Restrictions and Responsibilities of Unit Owners
Although buying a condominium unit offers advantages over buying a single family home, there are restrictions and responsibilities
that accompany condominium ownership.
Restrictions on the use of both the individual unit and the
common elements help to preserve the best interests of all unit owners. Many condominiums provide for limitations on the use,
occupancy, and transfer of a condominium unit. For example, there may be restrictions on types of window coverings, pets,
leasing, and the number of unit occupants.
Just as the use of the unit may be restricted, so may the use of the common
elements. While all unit owners have the right to use the common elements, they must use them in the manner provided in the
condominium documents and in the rules and regulations adopted by the board of directors of the association. Typical restrictions
on the use of the common elements include limitations on parking and types of vehicles allowed on the premises, limitations
on modifications to the condominium exterior, and restrictions on the use of recreational and other common facilities.
each condominium association has its own set of documents, the only way to determine the specific restrictions pertaining
to a particular condominium is to review those documents. In addition to the use restrictions provided in the declaration
of condominium, bylaws and articles of incorporation, the Condominium Act gives the board of directors the authority to adopt
reasonable rules and regulations concerning the use of the common elements, common areas, and the recreational facilities.
Restrictions are subject to change when the board of directors or unit owners properly amend the documents to provide for
such a change.
Financial Responsibilities of Unit Owners
The cost of operating and maintaining the condominium is funded through
collection of assessments by the association. Unit owners pay assessments for their shares of the common expenses according
to the proportions or percentages set forth in the declaration of condominium. In a residential condominium, a unit owner's
share of common expenses must be in the same proportions as their ownership interest in the common elements and the common
surplus or deficit. Also, for residential condominiums created after April 1, 1992, the ownership share of the common elements
assigned to each unit is required to be based either on square footage or on an equal fractional basis. Unit owners are expected
to pay assessments; therefore, assessments cannot be avoided by a unit owner choosing not to utilize various common facilities.
to unit owners vary depending upon the amenities and level of services being offered in a particular condominium. If you are
purchasing a unit from a developer, you are entitled to receive an estimated operating budget showing the expected costs of
operating the condominium prior to closing on your unit. Note that the budget is based on estimated expenses and may differ
significantly from the actual cost of association operations. Developers often provide a guarantee of assessments for one
or more fiscal periods. Such guarantees typically hold assessments to a lower amount than might occur without the developer's
guaranteed subsidy. Purchasers can expect an increase in the budget after the guarantee period expires.
may also expect to face special assessments. These assessments are in addition to the regular assessments that each unit owner
pays. Special assessments are typically levied when the association determines that there is either not enough money in the
budget for a particular expenditure, or the expenditure was not anticipated and therefore was not included in the annual budget.
Condominium documents often contain restrictions on the board's ability to levy special assessments.
Some of the expenses
which may be found in a condominium budget include: administration, management fees, maintenance, insurance, taxes, garbage
collection, pest control, utilities for common areas, and reserves for capital expenditures and deferred maintenance. There
are requirements in both the Condominium Act and the Division's administrative rules regarding how these expenses should be
In addition, the unit owner should expect to be individually responsible for such items as: real estate taxes,
cost of private telephone service and equipment, insurance covering the contents and interior of the unit, maintenance of
the interior of the condominium unit, privately contracted janitorial or maid services, and utility costs billed directly
to the unit owner. Further information along these lines may be found in the condominium documents.
Florida Condominium Law: Protections for Unit Owners
In addition to various protections granted to buyers, the Condominium Act contains provisions protecting the rights of
unit owners. These rights ensure that unit owners have the opportunity to be informed regarding the affairs of their condominium.
Others are intended to prevent problems and provide remedies for existing problems. Some of these rights are summarized below.
Unit owners are entitled to have an annual meeting. The date of the annual meeting for each association should
be stated in its bylaws. Unit owners are also entitled to receive advance notice of all other association meetings, board
of directors' meetings, and committee meetings. Depending upon the type of meeting, the noticing requirements contained in
the Condominium Act may be met by the association posting advance notice of a meeting on the condominium property, and/or
by mailing or delivering notice to each unit owner. The documents may also require additional notice. In addition to the right
to receive notice of meetings, unit owners also have a right to attend all unit owner meetings, board of directors' meetings,
and committee meetings (except those meetings specifically exempted by the law). Owners also have the right to speak at these
meetings on designated agenda items.
The election procedures provided in the Condominium Act require
the use of secret ballots or voting machines, and do not permit elections to be conducted by proxy. The association may provide
for alternate election procedures in its bylaws upon the approval of a majority of its total voting interests. These alternate
procedures may provide for elections to be conducted by general or limited proxy.
Along with the right to elect directors
in a condominium association, the Condominium Act also provides a procedure by which directors can be removed from office.
This process is known as recall. Directors may be recalled from the board with or without cause by the vote or agreement in
writing of a majority of the total voting interests.
Unit owners cannot be required to pay assessments (regular assessments based on the adopted budget) less
frequently than quarterly. Most associations collect monthly or quarterly assessments, the condominium documents should describe
the frequency of collection, due dates and provide for late fees and interest on delinquent assessments.
If the board
adopts a budget requiring an increase in excess of 115 percent of the assessments for the previous year, the board, upon receiving
a petition of 10 percent of the voting interests, shall call a special meeting of the unit owners to consider an alternate
budget. At this special meeting, unit owners can enact a new budget with the approval of a majority of the total voting interests.
If the association is under developer control, a budget cannot impose assessments greater than 115 percent of the assessments
for the previous year without approval of a majority of all the voting interests, including the voting interests of the developer.
the end of each fiscal year, unit owners are entitled to receive a year-end financial report. Depending upon the size of the
association and the amount of its annual revenues, a report of cash receipts and disbursements or more detailed financial
statements, prepared in accordance with generally accepted accounting principles is required to be prepared. The association
must either notify the owners that the report is available and provide a copy to the unit owner upon request (at no charge
to the owner) or distribute the report directly to the unit owners.
Association Books and Records
are entitled to have access to the official records of the association. These records must be maintained within the state.
Within five working days after receipt of a written request, the association must make the official records available for
a unit owner's inspection. An association is required to maintain these records for a specified period of time. For example,
minutes of any meeting and all accounting records must be maintained for at least seven years. Ballots, proxies, and other
papers relating to voting by unit owners must be maintained for at least one year. Other records, such as a copy of the recorded
declaration of condominium, must be retained permanently.
Unit owners may void certain types of
contracts entered into by the developer in the name of the association. Subject to specific requirements, unit owners may
also vote to cancel contracts entered into by unit owner controlled associations, such as a contract for cable television
service assessed against the unit owners as a common expense.
Finally, the Condominium Act provides unit owners and
their invited guests the right to peaceably assemble on the condominium property. This right is subject to reasonable rules
and regulations, promulgated by the board of directors, pertaining to the use of the common elements and recreational facilities.