Tenants rights, investment caps, document requirements and other legal specifics aimed at community associations.
Under Florida law a buyer can cancel a transaction within three days from the time the buyer executes the contract and receives a current copy of the condominium documents (the declaration of condominium, articles of incorporation, bylaws, rules of the association, most recent year-end financial information and the frequently asked questions and answers document).
The three-day period is calculated in business days. It excludes Saturdays, Sundays and legal holidays. This period cannot be waived or amended. (Section 718.503(2), Florida Statutes.)
The documents may list restrictions regarding pets, vehicles, parking, rentals and noise as well as requirements for flooring in condominiums, investor limits and many other issues that could affect the purchase.
The salesperson should advise the buyer to consult with an attorney knowledgeable about community association law to review the documents and the effect of any restrictions on the buyer’s purchase. (Section 718.503, Florida Statutes)
It is imp ortant to remember that these fees must be authorized by the association documents. If an HOA management company is charging a capital contribution fee on every resale without clear authority in the governing documents, the HOA board needs to consult with its legal counsel.
The new owner of a foreclosed property does not have to honor an existing lease agreement with a tenant. The new owner can give an existing tenant 30 days’ notice to vacate the property, assume the terms of the existing lease or negotiate a new lease with the existing tenant. A tenant evicted by the new owner m ust sue the former owner for a refund of the security deposit. ( S ection 83.561, Florida Statutes )
A Florida condominium association or homeowners association may collect a security deposit from a prospective tenant in addition to the sec urity deposit collected by the landlord — if the association’s governing documents provide the authority to do so. The purpose of that security deposit would be to protect the association’s common elements and common area.
In the case of condominium ass ociations, the deposit is capped at one month’s rent.
For homeowners associations, there is no cap on the amount of security deposit that an association may collect; however, the amount is subject to the rule of reasonableness.
A Florida community association has the right to impose a cap on the number of rentals in the community. They typically do this for a legitimate reason such as to stabilize property values in the community or to encourage mortgage lenders to lend money to prospective buyers.
However, the association must maintain proper records to show that the rental cap is applied consistently and uniformly.
For condominiums , if the board amends the governing documents to implement a rental cap, that action would not b e binding on existing owners unless they consented to the amendment. The rental cap would be binding on all buyers who purchase property after the amendment has taken effect.
For HOAs, however, the amendment would be binding on all owners as soon as it w as adopted.
Many community association documents prohibit tenants from damaging the common areas of the association and prohibit owners and their tenants from engaging in noxious or offensive activity. Any document like this is likely to be upheld as long as a "crime-free" lease addendum is not arbitrary in its application, does not violate a public policy and does not violate a fundamental constitutional right .
If a condominium owner is more than 90 days’ delinquent in paying assessments on a unit, the condominium association can suspend the rights of that owner – and any tenant for that unit – to use common aspects of association property until their fees are paid in full. The suspensions cannot apply to limited common elements intended to be used only by that unit, common elements needed to access the unit, utility services provided to the unit, parking spaces, or elevators. (Section 718. 303(4), Florida Statutes).
Additionally, both condominium associations and HOAs can make written demand of a tenant to submit rental payments to the association until the delinquent balance has been paid in full. (Sections 718.116(11) and 720.3085(8), Florida Statutes)
A condominium association may adopt an amendment prohibiting owners from renting their units, or placing special limits on rentals. This amendment would apply only to unit owners who consent to the amendments and those who buy units after the amendment’s effective date. Rental limits might include rental terms or specifying or limiting the number of times an owner can rent their unit during a specified time. ( Section 718.110(13), Florida Statutes.
For HOAs, except as otherwise provided in this paragraph, any governing document, or amendment to a governing document, that is enacted after July 1, 2021, and that prohibits or regulates rental agreements applies only to a parcel owner who acquires title to the parcel after the effective date of the governing document or amendment, or to a parcel owner who consents, individually or through a representative, to the governing document or amendment. (See Section 720.306(h), Florida Statutes, for more details on this law).
As of July 1, 2017, there is a cap on the amount an association can charge for an estoppel certificate on the property. An association can charge up to $250 to unit owners who are current in their assessments. They can charge an additional $100 for "expedited" estoppel certificates (delivered within three business days), and another $150 to owners who are delinquent in their assessments. This is a maximum of $500 for an expedited, delinquent estoppel certificate. The new law also requires certificates to be delivered within 10 business days and remain valid for 30 days. It also standardizes the information each certificate must include so that each estoppel contains the same information.