Nothing is certain but there are some distinct differences between California and Florida laws pertaining to condo laws, with California in a more favorable position relative to building safety and buyer review of seller disclosures. I'll explain why in segments.
Having sold many a condo, townhome or Planned Unit Development, governed by Homeowner Associations (HOA), I'm quite familiar with the volume of reading material facing the agents and buyer.
Today's focus is to compare how a Florida buyer purchases and reviews seller documentation versus how it is practiced in California.
In Florida, a buyer has 3 days to rescind from the sale of a condo, if buying from the condo owner as opposed to the developer (15 days). California's Purchase Contracts are typically set up to allow for 17 day reviews and inspections but this is negotiable.
The documentation provided by an HOA can be formidable, from Articles of Incorporation, Bylaws, Reserve Studies including the replacement costs and lifespan of building components, Minutes of the Board, Rules and Regulations, Financial and Budget Reports, Insurance Documentation and more. Three days would barely be enough to order inspections, review seller documentation and the HOA documentation.
While buyers in this market are waiving many of these reviews, if you are getting a loan, your lender is going to want to see how well the HOA is being run including occupancy ratios. Well run HOAs may even be FHA approved for FHA financing. It takes several extra steps to achieve this but it is available nationwide.
You will be required to sign off on the HOA documents as a separate contingency. Keep in mind, you will need to ensure you have all these documents as many Property Management companies who manage this for the HOA, have different practices for obtaining the documentation. You may very well need the 7 days the seller has to turn over documentation, plus more time to review and ask questions.
I will review how these HOA documents play into securing the viability of the building; including the role of board members and property managers. As printed in the Washington Post, July 7, 2021, what happened in Florida, involved both unique and common issues confronting a HOA. The total collapse of this building, speaks to how the HOA, sadly, wasn't working.
If you would like this free report, to help you understand better how your HOA is working or needs to work, please email me at Margaret.Kapranos@BHHSDrysdale.com.
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