In The News

Out With The Old....

by Eric Glazer

Over the last few years, the number of new condominiums in South Florida has exploded, and nowhere is the evidence more compelling than in Aventura. It seems as if every month or so a new condominium appears in our community, each one wider and taller than any of its predecessors. When the condominium is new, many unit owners are frustrated as the developer retains much of the control of the community, including the pace at which it is built, and otherwise dictates the direction of the community. What many unit owners don't know is that the developer is not in control until the very last unit is sold. On the contrary, Florida law provides protection for purchasers of new condominium units and attempts to provide the unit owners with the capacity to govern themselves after the developer has had a reasonable opportunity to see the units.

As soon as unit owners other than the developer own 15 percent of the units, the unit owners can elect no less than one-third of the board of directors of the association. In general, unit owners can elect a majority of the board three years after half the units have been sold, three months after 90 percent of the units are sold and no others are being constructed or offered for sale, or seven years after recording the declaration of condominium.

When the unit owners are entitled to elect a majority of the board, the developer must relinquish control and shall deliver to the association, bylaws and articles; minute books; house rules; formal resignations; all financial records of the association from the time the association was created and an audit of these records by an independent certified public accountant. The developer must also turn over all association funds, the building plans, a list of all contractors and subcontractors who developed the condominium, all the insurance polices, all warranties, a roster of unit owners and their addresses and all contracts previously entered into by the association.

Florida law also mandates that the developer provide certain warranties to each unit owner, including a three-year warranty on each unit commencing upon completion of the building containing the unit; the manufacturer's warranty on all personal property transferred with a unit; and a warranty on the roof, structural components, mechanical, electrical and plumbing elements for three years after completion of the building, or for one year after the owners control the association.

Upon transfer of control from the developer to the unit owners, the unit owners are well advised to hire the services of an engineering firm that can completely examine all of the items under statutory warranty. Defects should be reported to the developer and demand should be made for their immediate repair. Remember that these warranties have deadlines and that the unit owners will certainly benefit economically if serious defects are discovered and corrected during the warranty period rather than after expiration, which would then perhaps require passage of a special assessment.

CONDO QUIZ

In 1997, David Developer signs a laundry-equipment contract while he is still the developer of Dreamscape condominium and retains control of the board of directors. The contract is for a 10-year period and expires in 2007.

In 1999, David developer sells his last unit at Dreamscape and turns control of the association over to the unit owners. The unit owners are outraged at the contract's terms and prices and want to cancel it. Can the new board of directors' cancel this contract?

Yes. Florida Statute 718.302 gives the new board of directors the right to cancel a contract within 18 months after it assumes control of the board if a majority of the unit owners vote to cancel.

The hiring of a lawyer is an important decision that should not be based solely upon the contents of these articles. Before you decide, ask them to send you free written information about their qualifications and experience.

For more information you may contact Glazer & Sachs, P.A. at One Emerald Place 3113 Stirling Road Suite 201 Fort Lauderdale, Florida 33312. Telephone: (954) 983-1112.