Homeowners vs. Condo Associations: The Differences

ORLANDO, Fla. – With over 1.5 million condominium units (condos) in Florida and over 3.71 million homes in homeowners’ associations (HOAs), most Florida Realtors® members have helped parties prepare contracts that address issues associated with association rules.

There are important contract riders associated with each type of community. We’ll look at two specific riders – the CR-6x A Condominium Rider and the CR-6 B Homeowners’ Association/Community Disclosure.

For similarities, see: Homeowners vs. Condo Associations: The Similarities

Difference 1: Document delivery

A seller has an obligation to deliver certain association documents only for condominiums. This obligation comes from the Florida Statutes and is found in the ALL CAPS section of the rider.

The condo rider includes statutory disclosure language in Section 5, Non-Developer Disclosure. There are two options – box (a) or (b). Option (a) works if the buyer already received the documents at least 3 business days before signing the contract. Option (b) is far more common, though, so see below for a copy of that disclosure.

Note that the buyer will have a powerful right to void the contract until 3 business days after receiving the listed documents. Therefore, it’s usually in the seller’s best interest to remove this right to void as quickly as possible by delivering the documents and waiting for the 3-day clock to run out.

• THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER’S INTENTION TO CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION, BYLAWS AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF SO REQUESTED IN WRITING. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE BUYER RECEIVES THE DECLARATION, ARTICLES OF INCORPORATION, BYLAWS AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF REQUESTED IN WRITING. BUYER’S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.

The HOA disclosure language doesn’t obligate a seller to deliver documents. Instead, item 9 of the statutory disclosure (page 1 of the rider) informs the buyer on where to locate them. The buyer can track them down (or not), but there is no right to void the contract like there is in the condo disclosure copied above. If a buyer doesn’t know how to navigate a county’s public records, a title agent can usually assist in finding a HOA’s covenants and governing documents.

• THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

Difference 2: The Condo Rider addresses more issues

Condos generally have more regulations that impact a sale, so there are additional clauses to address them. Here are some clauses in the condo rider that aren’t mentioned in the HOA rider:

• right of first refusal
• disclosure of pending or anticipated litigation
• information about a sprinkler system retrofit
• clauses for a buyer to request documents or confirm receipt of documents
• common elements
• parking
• a brief summary of new regulations created in the wake of the collapse of the Champlain Towers South in Surfside

Difference 3: Similar clauses use slightly different words

While there are some similar clauses, the wording is not identical. For example, both riders contain a clause about association approval. Most of the words are the same, but there are subtle differences. For example, the association approval clause in the condo rider provides “If Buyer is not approved within the stated time period, this Contract shall terminate …” The HOA rider, however, provides “If approval is not granted within the stated time period above, Buyer may terminate this Contract …”

Therefore, while the condo rider would terminate automatically if the association hasn’t approved by the deadline (no notice required from either party), the HOA rider gives the buyer an option to terminate.

It’s subtle differences like this that should encourage a buyer or seller to re-read any clauses that address issues that arise in a transaction, consulting their own attorney if they need assistance or want to see how their issue fits within the larger framework of resolving legal disputes.

Joel Maxson is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication

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