Developer Turnover Of A Florida Condo Association
A brand-new condominium association always begins life under the aegis of the developer that constructed it. However, once construction is complete and enough units have been sold, the developer is required, under Florida law, to transfer the community over to an elected board of directors. That process is slow but sure, and it is in a new condo owner’s best interests to understand exactly what happens.
The Process
During construction and the initial sale period, the developer acts as the association’s board of directors, as well as assuming liability for any violations of the law or the new association’s governing documents. Over time, as sales targets are met, the developer cedes control over the board of directors little by little – for example, once 15 percent of the units are sold, the new (non-developer) owners are permitted to elect at least one-third of the board of directors. Over time, the percentage of owners who are independent of the developers will increase as more units are sold, until a majority (or even supermajority) results.
If the developer retains at least 5 percent of the units (or 2 percent in a condominium complex over 500 units), they may still hold at least one seat on the board of directors. However, they are generally restricted on holding much more – the law specifically states that the developer may never retain majority control of the development.
Must Hand Over All Documents
While sales milestones are one of the main goalposts by which turnover is measured, there must be an official turnover meeting between the developer and the new board of directors at the point when the non-developer owners acquire a majority of the seats. It is at this point that all of the relevant documents – the Declaration of Condominium, articles of incorporation, bylaws, contracts for employment or services, insurance policies, and many potential others – must be turned over to the new board.
In addition, the developer must have a turnover audit performed, to ensure that the new board has the clearest possible financial picture. However, it will be the new owners who must review obligations and contracts, to ensure that the association will be dealing fairly going forward – it is possible for contracts entered into by the developer to be voided by the board, if enough owners vote to do so.
Call A Tampa Condominium Association Attorney
The turnover process can be difficult and confusing, particularly for individual owners who may not have any experience with Florida condominium law. If you have questions or concerns about the process, or about your own role in it, calling a Tampa condominium association attorney from the Seward Law Office can be a good first step toward getting those managed. Call our office today at 813-252-6789 to schedule a consultation.
Source:
myfloridalicense.com/dbpr/lsc/documents/CondoRules.pdf
