Article Courtesy of  Florida Realtors       

Published August 30, 2020

Tenants rights, investment caps, document requirements and other legal specifics aimed at community associations.
     

Capital contribution fees and Transfer fees Condominium associations can't charge any fees for the sale, mortgage, lease, sublease or other transfer of a unit unless the association is required to approve such transfer and a fee for such approval is provided for in the declaration, articles or bylaws. Such fee may be preset, but in no event may such fee exceed $100 per applicant other than husband/wife or parent/dependent child, which are considered one applicant. These fees are to be used for screening and transfer approval only, not for capital contributions. (Section 718.112(2)(i), Florida Statutes). Homeowners Associations (HOAs) do not have this restriction. Many developers charge a one-time capital contribution when the developer sells a home to the first purchaser. In some cases, this money is set aside and delivered to the HOA at turnover to provide the community with start-up funds. After turnover from the developer, the HOA, as controlled by the members, can continue to charge a capital contribution fee on resales.

The amount of the capital contribution fee in an HOA is regulated by the association’s documents, and the HOA membership can amend the documents after developer turnover to increase or decrease the amount of the fee.

It is important 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.

A community association may charge a fee for tenant screening as long as the authority to conduct tenant screening and the fee is contained in the governing documents.

 
For homeowners associations, there is no cap on a screening fee, but the amount must be considered reasonable.

The Department of Business and Professional Regulation (DBPR) sets certain requirements for management firms, including dealing honestly and fairly with the community association. Any violation of these requirements should be reported to the association's Board of Directors and to the DBPR.

If you or an owner believes the management company is acting in an unethical manner, email the DBPR at www.myfloridalicense.com/dbpr  or call 850-487-1395.

Tenant rentals and foreclosure
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 must sue the former owner for a refund of the security deposit.(Section 83.561, Florida Statutes)

Security deposits
A Florida condominium association or homeowners association may collect a security deposit from a prospective tenant in addition to the security 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 associations, 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.

Investment caps
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 be 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 was adopted.

'Crime-free' lease addenda
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.

Association documents
When purchasing a condominium, the buyer is entitled to the following documents, to be prepared at the seller’s expense: declaration of condominium, articles of incorporation, bylaws and rules, a copy of the most recent year-end financial information and frequently asked questions and answers document. 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 seller of residential condo resale does have a set amount of time in which to provide condominium documents to the buyer. However, note that the buyer's three-day right to cancel begins once the buyer has received all the documents, so it is in the best interest of the seller to provide these documents as soon as possible.

When purchasing a property subject to an HOA, the buyer is entitled to receive a disclosure summary only, not specific association documents like a purchaser of a condominium. This summary includes information such as mandatory membership and any assessments regarding the property.

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.

Tenants’ rights and landlord responsibilities
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)

Rental limits
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.

Estoppel certificates
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.