Florida Realtors certainly have a lot on their plates regarding making sure all of their t’s are crossed and i’s dotted on all necessary documents over the course of a residential real estate transaction, including listing agreements, contracts, any necessary addenda, and sometimes much more. Generally, Realtors do an excellent job of ensuring all of these documents are in proper order. However, one such document is often not filled out accurately or sometimes not included: The FAR/BAR Condominium Rider (“Condo Rider”). As discussed below, improperly filling out or even omitting the Condo Rider can have disastrous consequences on real estate transactions involving condominium associations.
Is the Condo Rider really necessary?
Florida Statutes Section 718.503 provides that Buyers who have entered into a contract to purchase a condo unit are entitled, at Seller’s expense, to receipt of certain documents, such as the declaration of condominium, bylaws and rules, and a copy of a governance form, among others (“Condo Documents”). Additionally, Section 718.503 provides that contracts shall contain a clause either acknowledging that Buyer has received the necessary Condo Documents more than three days prior to the execution of the Contract or that the Contract is voidable by Buyer by delivering written notice of intent to cancel within three days after the effective date and receipt of the Condo Documents. Both clauses are conveniently contained in the Condo Rider; thus, the Condo Rider, or a substantially similar document, must be included. It’s important to note that if the Contract itself references the Condo Rider by checking box 19(A) or otherwise references it, then the Condo Rider must be included and properly executed. If it is not, the Buyer may be able to cancel the Contract due to this omission.
Who pays for special assessments?
In addition to the statutory requirements discussed above, the Condo Rider contains several other provisions which are very important to both Buyer and Seller, including Section 3(c), which determines which party is responsible for payment of pending special assessments imposed by the Association. If Section 3(c) is overlooked and left entirely blank, Seller will be responsible for paying in full any special assessments pending against the unit as of the Effective Date. For example, suppose there was such a special assessment pending. In that case, you can imagine the Seller’s surprise and disappointment when they are told they must pay the special assessment in full prior to closing because the Condo Rider was not filled out correctly! Unfortunately, such a scenario is quite common, but you can easily avoid it by paying proper attention to the Condo Rider and filling it out correctly.
Other important disclosures and additional information contained in the Condo Rider
Besides the disclosures and provisions discussed above, the Condo Rider also provides Sellers’ answers to the following questions for the Buyer’s review and acceptance:
- Does the Association require the approval of all Buyers?
- Does the Association have a Right of First Refusal?
- What are the current Association assessment(s), and when are installment payments due?
- Is the Association currently involved in pending or anticipated litigation?
- Is there an assigned parking space that transfers with the unit?
As discussed above, Florida law makes it clear that providing specific Condo Documents to Buyers and including certain clauses regarding said documents is not optional. Additionally, it is in all parties best interest to determine who will pay what to the Association, how much, and when. Whether on the listing or selling side of a transaction, to avoid potentially disastrous consequences, all parties to a condominium transaction must ensure that a properly executed Condo Rider is attached to the Contract every time. If you have any questions on this or any real estate topic, please don’t hesitate to contact your trusted local real estate attorney.
Andrew Conaboy, Esq. email@example.com
Andrew is a partner at Berlin Patten Ebling and manages the Venice office. He focuses his practice in the areas of residential and commercial real property transactions.