What Is a Community Association Disclosure?
When a buyer purchases a home inside a Florida HOA community or a condominium building, they are not just buying a house; they are legally binding themselves to a massive set of rules and financial obligations controlled by the community association.
To prevent buyers from blindly walking into a financially distressed or heavily restricted community, Florida law mandates that sellers provide a comprehensive Community Association Disclosure package. For condos, these requirements are codified in Florida Statute 718.503. For HOAs, the disclosure requirements are found in Florida Statute 720.401.
What Must Be Disclosed
The disclosure package typically includes:
- Governing Documents — The Declaration of Condominium (or HOA Covenants), the Bylaws, the Articles of Incorporation, and the Rules and Regulations. These documents dictate everything from pet policies to rental restrictions to parking assignments.
- Financial Statements — The association's annual budget, year-end financial report, and reserve fund status. This reveals whether the association is financially healthy or on the brink of levying a massive special assessment.
- Pending Litigation — If the association is currently being sued (or is suing someone), the buyer must be told. A massive construction defect lawsuit can signal years of legal fees and potential special assessments.
- Assessment History — Any recently approved or anticipated special assessments must be disclosed.
The Buyer's Cancellation Right
After receiving the condo disclosure documents, the buyer has a strict statutory right to cancel the contract within 3 days (for resale condos under 718.503) or 15 days (for new condo purchases from a developer under 718.503(1)). This cancellation right is absolute and non-waivable. If the buyer reads the financials and discovers the association is bankrupt, they can walk away and get their entire earnest money deposit back.
Related Terms
- Condominium Rider — The contract addendum that triggers the delivery of disclosure documents
- Assessments — The financial obligations revealed in the disclosure package
- HOA — The governing body whose rules and finances are being disclosed
Barnes Walker Association Transactions
Barnes Walker's real estate attorneys meticulously review Florida community association disclosure packages on behalf of buyers, identifying hidden financial risks such as underfunded reserves, pending construction defect lawsuits, and looming special assessments before the statutory cancellation window expires. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC