REALTOR® ATTORNEY JOINT COMMITTEE
The Condo Tool Kit By: Andrew Conaboy, Esq., Berlin Patten Ebling
I
n the wake of the devastating collapse of the Champlain Towers South building in Surfside, Florida earlier this year, real estate attorneys across the state have been busy fielding calls asking what can be done when deciding whether to purchase a condo to be as certain as possible that something like the Surfside collapse will not happen to their new condo. While it may be impossible to learn all there is to know about the structure of the condo building in the relatively short amount of time between when a contract is signed and the closing date, by using the tools and strategies discussed below, buyers can at least be as comfortable as possible knowing they did as much due diligence as they could before finalizing the purchase. 1 | Seller Disclosures: Sellers have an affirmative duty to disclose any property defects which might materially impact the value of the property which may not be readily observable by buyers. Thus, it is imperative for buyers to review the seller’s property disclosure form prior to entering into a contract. If the property disclosure has not been made available, buyers should insist one be furnished prior to moving forward. Additionally, buyers should ensure that sellers provide a seller’s Condo Disclosure form, as opposed to a single-family home disclosure. The Condo Disclosure asks additional questions of the seller that are not included in the standard single-family home disclosure. 2 | Condo Rider: If you take nothing else away from this article, it is my hope you will be left with the importance of including a Condominium Rider with the contract. Specifically, the latest FAR/BAR Condominium Rider (the “Rider”) is strongly recommended. By adding the Condo Rider to the contract, buyers obtain additional information from the seller that they might not otherwise know, including what the current assessments are, any potential pending assessments, whether or not the buyers have to be approved by the Board, and much more. If there are any special assessments, levied or pending, the Rider also designates who will pay for them. Perhaps most importantly, Section 14 | ELEVATE [ DECEMBER 2021 ]
5 of the Rider also establishes the buyers’ right to cancel the contract within 3 days of receipt of certain condo documents, as further discussed below. 3 | Condo Documents Review: As previously stated, the Rider establishes the buyers’ right to review documents within 3 days of the effective date. Those documents include the Declaration of Condominium, Articles of Incorporation, Bylaws and Rules of the Association, most recent year-end financial information, and Frequently Asked Questions. A thorough review of these documents can give the buyer a sense of comfort that the condo is financially sound in addition to gaining a strong understanding of the rules and restrictions in place. However, these documents may not tell the whole story or answer all of the buyers questions. The buyer can insist that additional documents be included in the list mentioned by adding appropriate language to the contract. For example, the buyer can include language adding to the list the past year’s Association meeting minutes and records of special assessments for the current year and past years. This will give the buyer a clearer picture of what the Board has been discussing recently, including potentially addressing structural issues. As you can see, there are several tools buyers can take prior to being locked into a contract in order to feel as comfortable as possible that the condo they are purchasing is in sound shape structurally, financially, and managerially. Should you have any questions on this topic, please do not hesitate to contact the Realtor® Attorney Joint Committee or your trusted local real estate attorney. • This article is meant for educational purposes only. It is not intended to serve as legal advice and should not be used as a substitute for consultation with an attorney.
