PART
VI
CONVERSIONS TO CONDOMINIUM
(ss. 718.604-718.622) |
718.604 Short
title.
718.606 Conversion
of existing improvements to condominium; rental agreements.
718.608 Notice
of intended conversion; time of delivery; content.
718.61 Notices.
718.612 Right
of first refusal.
718.614 Economic
information to be provided.
718.616 Disclosure
of condition of building and estimated replacement costs and notification
of municipalities.
718.618 Converter
reserve accounts; warranties.
718.62 Prohibition
of discrimination against nonpurchasing tenants.
718.621 Rulemaking
authority.
718.622 Saving
clause.
718.604
Short title.--
This part shall be known and may be cited as the "Roth Act" in memory
of Mr. James S. Roth, Director, Division of Florida Land Sales and Condominiums,
1979-1980.
718.606
Conversion of existing improvements to condominium; rental agreements.--
When existing improvements are converted to ownership as a residential
condominium:
(1)(a) Each residential tenant who has resided in the existing
improvements for at least the 180 days preceding the date of the written
notice of intended conversion shall have the right to extend an expiring
rental agreement upon the same terms for a period that will expire no later
than 270 days after the date of the notice. If the rental agreement expires
more than 270 days after the date of the notice, the tenant may not unilaterally
extend the rental agreement.
(b) Each other residential tenant shall have the right to extend
an expiring rental agreement upon the same terms for a period that will
expire no later than 180 days after the date of the written notice of intended
conversion. If the rental agreement expires more than 180 days after the
date of the notice, the tenant may not unilaterally extend the rental agreement.
(2)(a) In order to extend the rental agreement as provided in
subsection (1), a tenant shall, within 45 days after the date of the written
notice of intended conversion, give written notice to the developer of
the intention to extend the rental agreement.
(b) If the rental agreement will expire within 45 days following
the date of the notice, the tenant may remain in occupancy for the 45-day
decision period upon the same terms by giving the developer written notice
and paying rent on a pro rata basis from the expiration date of the rental
agreement to the end of the 45-day period.
(c) The tenant may extend the rental agreement for the full extension
period or a part of the period.
(3) After the date of a notice of intended conversion, a tenant
may terminate any rental agreement, or any extension period having an unexpired
term of 180 days or less, upon 30 days' written notice to the developer.
However, unless the rental agreement was entered into, extended, or renewed
after the effective date of this part, the tenant may not unilaterally
terminate the rental agreement but may unilaterally terminate any extension
period having an unexpired term of 180 days or less upon 30 days' written
notice.
(4) A developer may elect to provide tenants who have been continuous
residents of the existing improvements for at least 180 days preceding
the date of the written notice of intended conversion and whose rental
agreements expire within 180 days of the date of the written notice of
intended conversion the option of receiving in cash a tenant relocation
payment at least equal to 1 month's rent in consideration for extending
the rental agreement for not more than 180 days, rather than extending
the rental agreement for up to 270 days.
(5) A rental agreement may provide for termination by the developer
upon 60 days' written notice if the rental agreement is entered into subsequent
to the delivery of the written notice of intended conversion to all tenants
and conspicuously states that the existing improvements are to be converted.
No other provision in a rental agreement shall be enforceable to the extent
that it purports to reduce the extension period provided by this section
or otherwise would permit a developer to terminate a rental agreement in
the event of a conversion. This subsection applies to rental agreements
entered into, extended, or renewed after the effective date of this part;
the termination provisions of all other rental agreements are governed
by the provisions of s. 718.402(3), Florida Statutes 1979.
(6) Any provision of this section or of the rental agreement
or other contract or agreement to the contrary notwithstanding, whenever
a county, including a charter county, determines that there exists within
the county a vacancy rate in rental housing of 3 percent or less, the county
may adopt an ordinance or other measure extending the 270-day extension
period described in paragraph (1)(a) and the 180-day extension described
in paragraph (1)(b) for an additional 90 days, if:
(a) Such measure was duly adopted, after notice and public hearing,
in accordance with all applicable provisions of the charter governing the
county and any other applicable laws; and
(b) The governing body has made and recited in such measure its
findings establishing the existence in fact of a housing emergency so grave
as to constitute a serious menace to the general public and that such controls
are necessary and proper to eliminate such grave housing emergency.
A county ordinance or other measure adopting an additional 90-day extension
under the provisions of this section is controlling throughout the entire
county, including a charter county, where adopted, including all municipalities,
unless a municipality votes not to have it apply within its boundaries.
718.608
Notice of intended conversion; time of delivery; content.--
(1) Prior to or simultaneous with the first offering of individual
units to any person, each developer shall deliver a notice of intended
conversion to all tenants of the existing improvements being converted
to residential condominium. All such notices shall be given within a 72-hour
period.
(2)(a) Each notice of intended conversion shall be dated and
in writing. The notice shall contain the following statement, with the
phrases of the following statement which appear in upper case printed in
conspicuous type:
These apartments are being converted to condominium by (name of
developer) , the developer.
1. YOU MAY REMAIN AS A RESIDENT UNTIL THE EXPIRATION OF YOUR
RENTAL AGREEMENT. FURTHER, YOU MAY EXTEND YOUR RENTAL AGREEMENT AS FOLLOWS:
a. If you have continuously been a resident of these apartments
during the last 180 days and your rental agreement expires during the next
270 days, you may extend your rental agreement for up to 270 days after
the date of this notice.
b. If you have not been a continuous resident of these apartments
for the last 180 days and your rental agreement expires during the next
180 days, you may extend your rental agreement for up to 180 days after
the date of this notice.
c. IN ORDER FOR YOU TO EXTEND YOUR RENTAL AGREEMENT, YOU MUST
GIVE THE DEVELOPER WRITTEN NOTICE WITHIN 45 DAYS AFTER THE DATE OF THIS
NOTICE.
2. IF YOUR RENTAL AGREEMENT EXPIRES IN THE NEXT 45 DAYS, you
may extend your rental agreement for up to 45 days after the date of this
notice while you decide whether to extend your rental agreement as explained
above. To do so, you must notify the developer in writing. You will then
have the full 45 days to decide whether to extend your rental agreement
as explained above.
3. During the extension of your rental agreement you will be
charged the same rent that you are now paying.
4. YOU MAY CANCEL YOUR RENTAL AGREEMENT AND ANY EXTENSION OF
THE RENTAL AGREEMENT AS FOLLOWS:
a. If your rental agreement began or was extended or renewed
after May 1, 1980, and your rental agreement, including extensions and
renewals, has an unexpired term of 180 days or less, you may cancel your
rental agreement upon 30 days' written notice and move. Also, upon 30 days'
written notice, you may cancel any extension of the rental agreement.
b. If your rental agreement was not begun or was not extended
or renewed after May 1, 1980, you may not cancel the rental agreement without
the consent of the developer. If your rental agreement, including extensions
and renewals, has an unexpired term of 180 days or less, you may, however,
upon 30 days' written notice cancel any extension of the rental agreement.
5. All notices must be given in writing and sent by mail, return
receipt requested, or delivered in person to the developer at this address:
(name and address of developer) .
6. If you have continuously been a resident of these apartments
during the last 180 days:
a. You have the right to purchase your apartment and will have
45 days to decide whether to purchase. If you do not buy the unit at that
price and the unit is later offered at a lower price, you will have the
opportunity to buy the unit at the lower price. However, in all events
your right to purchase the unit ends when the rental agreement or any extension
of the rental agreement ends or when you waive this right in writing.
b. Within 90 days you will be provided purchase information relating
to your apartment, including the price of your unit and the condition of
the building. If you do not receive this information within 90 days, your
rental agreement and any extension will be extended 1 day for each day
over 90 days until you are given the purchase information. If you do not
want this rental agreement extension, you must notify the developer in
writing.
7. If you have any questions regarding this conversion or the
Condominium Act, you may contact the developer or the state agency which
regulates condominiums: The Division of Florida Land Sales, Condominiums,
and Mobile Homes, (Tallahassee address and telephone number of division)
.
(b) When a developer offers tenants an optional tenant relocation
payment pursuant to s. 718.606(4), the notice of intended conversion shall
contain a statement substantially as follows:
If you have been a continuous resident of these apartments for the
last 180 days and your lease expires during the next 180 days, you may
extend your rental agreement for up to 270 days, or you may extend your
rental agreement for up to 180 days and receive a cash payment at least
equal to 1 month's rent. You must make your decision and inform the developer
in writing within 45 days after the date of this notice.
(c) When the rental agreement extension provisions of s. 718.606(6)
are applicable to a conversion, subparagraphs 1.a. and b. of the notice
of intended conversion shall read as follows:
1. YOU MAY REMAIN AS A RESIDENT UNTIL THE EXPIRATION OF YOUR RENTAL
AGREEMENT. FURTHER, YOU MAY EXTEND YOUR RENTAL AGREEMENT AS FOLLOWS:
a. If you have continuously been a resident of these apartments
during the last 180 days and your rental agreement expires during the next
360 days, you may extend your rental agreement for up to 360 days after
the date of this notice.
b. If you have not been a continuous resident of these apartments
for the last 180 days and your rental agreement expires during the next
270 days, you may extend your rental agreement for up to 270 days after
the date of this notice.
(3) Notice of intended conversion may not be waived by a tenant
unless the tenant's lease conspicuously states that the building is to
be converted and the other tenants residing in the building have previously
received a notice of intended conversion.
(4) Upon the request of a developer and payment of a fee prescribed
by the rules of the division, not to exceed $50, the division may verify
to a developer that a notice complies with this section.
(5) Prior to delivering a notice of intended conversion to tenants
of existing improvements being converted to a residential condominium,
each developer shall file with the division and receive approval of a copy
of the notice of intended conversion. Upon filing, each developer shall
pay to the division a filing fee of $100.
718.61
Notices.--
(1) All notices from tenants to a developer shall be deemed given
when deposited in the United States mail, addressed to the developer's
address as stated in the notice of conversion, and sent postage prepaid,
return receipt requested, or when personally delivered in writing by the
tenant to the developer at such address. The date of a notice is the date
when it is mailed or personally delivered by the tenant.
(2) All notices from developers to tenants shall be deemed given
when deposited in the United States mail, addressed to the tenant's last
known residence, which may be the address of the property subject to the
rental agreement, and sent by certified or registered mail, postage prepaid.
The date of a notice is the date when it is mailed to the tenant.
718.612
Right of first refusal.--
(1) Each tenant, who for the 180 days preceding a notice of intended
conversion has been a residential tenant of the existing improvements,
shall have the right of first refusal to purchase the unit in which he
or she resides on the date of the notice, under the following terms and
conditions:
(a) Within 90 days following the written notice of the intended
conversion, the developer shall deliver to the tenant the following purchase
materials: an offer to sell stating the price and terms of purchase, the
economic information required by s. 718.614, and the disclosure documents
required by ss. 718.503 and 718.504. The failure by the developer to deliver
such purchase materials within 90 days following the written notice of
the intended conversion will automatically extend the rental agreement,
any extension of the rental agreement provided for in s. 718.606, or any
other extension of the rental agreement. The extension shall be for that
number of days in excess of 90 days that has elapsed from the date of the
written notice of the intended conversion to the date when the purchase
materials are delivered.
(b) The tenant shall have the right of first refusal to purchase
the unit for a period of not less than 45 days after mailing or personal
delivery of the purchase materials.
(c) If, after any right of first refusal has expired, the developer
offers the unit at a price lower than that offered to the tenant, the developer
shall in writing notify the tenant prior to the publication of the offer.
The tenant shall have the right of first refusal at the lower price for
a period of not less than an additional 10 days after the date of the notice.
Thereafter, the tenant shall have no additional right of first refusal.
As used in this paragraph, the term "offer" includes any solicitation to
the general public by means of newspaper advertisement, radio, television,
or written or printed sales literature or price list but does not include
a transaction involving the sale of more than one unit to one purchaser.
(2) Prior to closing on the sale of the unit, a tenant alleging
a developer's violation of paragraph (1)(c) may bring an action for equitable
or other relief, including specific performance. Subsequent to closing,
the tenant's sole remedy for such a violation will be damages. In addition
to any damages otherwise recoverable by law, the tenant is entitled to
an amount equal to the difference between the price last offered in writing
to the tenant pursuant to this section and the price at which the unit
was sold to a third party, plus court costs and attorney's fees.
(3) It is against the public policy of this state for any developer
to seek to enforce any provision of any contract which purports to waive
the right of a purchasing tenant to bring an action for specific performance.
(4) A tenant's right of first refusal terminates upon:
(a) The termination of the rental agreement and all extensions
thereof;
(b) Waiver of the right in writing by the tenant, if the waiver
is executed subsequent to the date of the notice of intended conversion.
A tenant who waives the right of first refusal waives the right to receive
the purchase materials; or
(c) The running of the tenant's 45-day right of first refusal
and the additional 10-day period provided for by paragraph (1)(c), if applicable.
718.614
Economic information to be provided.--
The developer shall distribute to tenants having a right of first refusal,
if any:
(1) Information in summary form regarding mortgage financing;
estimated down payment; alternative financing and down payments; monthly
payments of principal, interest, and real estate taxes; and federal income
tax benefits.
(2) Any other information which the division publishes and by
rule determines will assist tenants in making a decision and which the
division makes available to the developer.
718.616
Disclosure of condition of building and estimated replacement costs and
notification of municipalities.--
(1) Each developer of a residential condominium created by converting
existing, previously occupied improvements to such form of ownership shall
disclose the condition of the improvements and the condition of certain
components and their current estimated replacement costs.
(2) The following information shall be stated concerning the
improvements:
(a) The date and type of construction.
(b) The prior use.
(c) Whether there is termite damage or infestation and whether
the termite damage or infestation, if any, has been properly treated. The
statement shall be substantiated by including, as an exhibit, an inspection
report by a certified pest control operator.
(3)(a) Disclosure of condition shall be made for each of the
following components that the existing improvements may include:
1. Roof.
2. Structure.
3. Fireproofing and fire protection systems.
4. Elevators.
5. Heating and cooling systems.
6. Plumbing.
7. Electrical systems.
8. Swimming pool.
9. Seawalls.
10. Pavement and parking areas.
11. Drainage systems.
(b) For each component, the following information shall be disclosed
and substantiated by attaching a copy of a certificate under seal of an
architect or engineer authorized to practice in this state:
1. The age of the component.
2. The estimated remaining useful life of the component.
3. The estimated current replacement cost of the component, expressed:
a. As a total amount; and
b. As a per-unit amount, based upon each unit's proportional
share of the common expenses.
4. The structural and functional soundness of the component.
(4) If the proposed condominium is situated within a municipality,
the disclosure shall include a letter from the municipality acknowledging
that the municipality has been notified of the proposed creation of a residential
condominium by conversion of existing, previously occupied improvements
and, in any county, as defined in s. 125.011(1), acknowledging compliance
with applicable zoning requirements as determined by the municipality.
718.618
Converter reserve accounts; warranties.--
(1) When existing improvements are converted to ownership as
a residential condominium, the developer shall establish reserve accounts
for capital expenditures and deferred maintenance, or give warranties as
provided by subsection (6), or post a surety bond as provided by subsection
(7). The developer shall fund the reserve accounts in amounts calculated
as follows:
(a)1. When the existing improvements include an air-conditioning
system serving more than one unit or property which the association is
responsible to repair, maintain, or replace, the developer shall fund an
air-conditioning reserve account. The amount of the reserve account shall
be the product of the estimated current replacement cost of the system,
as disclosed and substantiated pursuant to s. 718.616(3)(b), multiplied
by a fraction, the numerator of which shall be the lesser of the age of
the system in years or 9, and the denominator of which shall be 10. When
such air-conditioning system is within 1,000 yards of the seacoast, the
numerator shall be the lesser of the age of the system in years or 3, and
the denominator shall be 4.
2. The developer shall fund a plumbing reserve account. The amount
of the funding shall be the product of the estimated current replacement
cost of the plumbing component, as disclosed and substantiated pursuant
to s. 718.616(3)(b), multiplied by a fraction, the numerator of which shall
be the lesser of the age of the plumbing in years or 36, and the denominator
of which shall be 40.
3. The developer shall fund a roof reserve account. The amount
of the funding shall be the product of the estimated current replacement
cost of the roofing component, as disclosed and substantiated pursuant
to s. 718.616(3)(b), multiplied by a fraction, the numerator of which shall
be the lesser of the age of the roof in years or the numerator listed in
the following table. The denominator of the fraction shall be determined
based on the roof type, as follows: Roof Type Numerator Denominator
|
Roof Type |
Numerator |
Denominator |
a. |
Built-up roof without insulation |
4 |
5 |
b. |
Built-up roof with insulation |
4 |
5 |
c. |
Cement tile roof |
45 |
50 |
d. |
Asphalt shingle roof |
14 |
15 |
e. |
Copper roof |
|
|
f. |
Wood shingle roof |
9 |
10 |
g. |
All other types |
18 |
20 |
(b) The age of any component or structure for which the developer
is required to fund a reserve account shall be measured in years from the later
of:
1. The date when the component or structure was replaced or
substantially renewed, if the replacement or renewal of the component at least
met the requirements of the then-applicable building code; or
2. The date when the installation or construction of the existing
component or structure was completed.
(c) When the age of a component or structure is to be measured
from the date of replacement or renewal, the developer shall provide the
division with a certificate, under the seal of an architect or engineer
authorized to practice in this state, verifying:
1. The date of the replacement or renewal; and
2. That the replacement or renewal at least met the requirements
of the then-applicable building code.
(d) In addition to establishing the reserve accounts specified
above, the developer shall establish those other reserve accounts required by s.
718.112(2)(f), and shall fund those accounts in accordance with the formula
provided therein.
(2)(a) The developer shall fund the reserve account required by
subsection (1), on a pro rata basis upon the sale of each unit. The developer
shall deposit in the reserve account not less than a percentage of the total
amount to be deposited in the reserve account equal to the percentage of
ownership of the common elements allocable to the unit sold. When a developer
deposits amounts in excess of the minimum reserve account funding, later
deposits may be reduced to the extent of the excess funding. For the purposes of
this subsection, a unit is considered sold when a fee interest in the unit is
transferred to a third party or the unit is leased for a period in excess of 5
years.
(b) When an association makes an expenditure of reserve account
funds before the developer has sold all units, the developer shall make a
deposit in the reserve account. Such deposit shall be at least equal to that
portion of the expenditure which would be charged against the reserve account
deposit that would have been made for any such unit had the unit been sold. Such
deposit may be reduced to the extent the developer has funded the reserve
account in excess of the minimum reserve account funding required by this
subsection. This paragraph applies only when the developer has funded reserve
accounts as provided by paragraph (a).
(3) The use of reserve account funds is limited as follows:
(a) Reserve account funds may be spent prior to the assumption of
control of the association by unit owners other than the developer; and
(b) Reserve account funds may be expended only for repair or
replacement of the specific components for which the funds were deposited,
unless, after assumption of control of the association by unit owners other than
the developer, it is determined by three-fourths of the voting interests in the
condominium to expend the funds for other purposes.
(4) The developer shall establish the reserve account in the name
of the association at a bank, savings and loan association, or trust company
located in this state.
(5) A developer may establish and fund additional reserve
accounts.
(6) A developer makes no implied warranties when existing
improvements are converted to ownership as a residential condominium and reserve
accounts are funded in accordance with this section. As an alternative to
establishing such reserve accounts, or when a developer fails to establish the
reserve accounts in accordance with this section, the developer shall be deemed
to have granted to the purchaser of each unit an implied warranty of fitness and
merchantability for the purposes or uses intended, as to the roof and structural
components of the improvements; as to fireproofing and fire protection systems;
and as to mechanical, electrical, and plumbing elements serving the
improvements, except mechanical elements serving only one unit. The warranty
shall be for a period beginning with the notice of intended conversion and
continuing for 3 years thereafter, or the recording of the declaration to
condominium and continuing for 3 years thereafter, or 1 year after owners other
than the developer obtain control of the association, whichever occurs last, but
in no event more than 5 years.
(a) The warranty provided for in this section is conditioned upon
routine maintenance being performed, unless the maintenance is an obligation of
the developer or a developer-controlled association.
(b) The warranty shall inure to the benefit of each owner and
successor owner.
(c) Existing improvements converted to residential condominium may
be covered by an insured warranty program underwritten by an insurance company
authorized to do business in this state, if such warranty program meets the
minimum requirements of this chapter. To the degree that the warranty program
does not meet the minimum requirements of this chapter, such requirements shall
apply.
(7) When a developer desires to post a surety bond, the developer
shall, after notification to the buyer, acquire a surety bond issued by a
company licensed to do business in this state, if such a bond is readily
available in the open market, in an amount which would be equal to the total
amount of all reserve accounts required under subsection (1), payable to the
association.
(8) The amended provisions of this section do not affect a
conversion of existing improvements when a developer has filed a notice of
intended conversion and the documents required by s. 718.503 or s. 718.504, as
applicable, with the division prior to the effective date of this law, provided:
(a) The documents are proper for filing purposes.
(b) The developer, not later than 6 months after such filing:
1. Records a declaration for such filing in accordance with part
I.
2. Gives a notice of intended conversion.
718.62
Prohibition of discrimination against nonpurchasing tenants.--
When existing improvements are converted to condominium, tenants who have
not purchased a unit in the condominium being created shall, during the
remaining term of the rental agreement and any extension thereof, be entitled to
the same rights, privileges, and services that were enjoyed by all tenants prior
to the date of the written notice of conversion and that are granted, offered,
or provided to purchasers.
718.621
Rulemaking authority.--
The division is authorized to adopt rules pursuant to the Administrative
Procedure Act to administer and ensure compliance with developers' obligations
with respect to condominium conversions concerning the filing and noticing of
intended conversion, rental agreement extensions, rights of first refusal, and
disclosure and postpurchase protections.
718.622
Saving clause.--
(1) All notices of intended conversion given subsequent to the
effective date of this part shall be subject to the requirements of ss.
718.606, 718.608, and 718.61. Tenants given such notices shall have a right
of first refusal as provided by s. 718.612.
(2) The disclosure provided by s. 718.616 and required by ss.
718.503 and 718.504 to be furnished to each prospective buyer or lessee
for a period of more than 5 years shall be provided to any such person
who has not, prior to May 1, 1980, been furnished the documents, prospectus,
or offering circular required by ss. 718.503 and 718.504.
(3) The provisions of s. 718.618 do not affect a conversion of
existing improvements when a developer has filed with the division prior
to May 1, 1980, provided:
(a) The documents are proper for filing purposes; and
(b) The developer, not later than 6 months after such filing:
1. Records a declaration for such filing in accordance with part
I of this chapter, and
2. Gives a notice of intended conversion. |