Overview of Condominiums and applicable Florida laws: What is a Condominium (“Condo”)?

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September 14, 2015

As defined by section 718.103, Florida Statutes, “Condominium” means that form of ownership of real property created pursuant to Chapter 718 of the Florida Statutes, which is comprised entirely of units that may be owned by one or more persons, and in which there is, appurtenant to each unit, an undivided share in common elements. The term condominium can be applied to many different kinds of structures, but all condos share many common attributes. A unit describes an individual owner’s interest in the condominium development. In a condo, there is generally no individual ownership of land; the unit owners jointly own the land and building exteriors. Each unit owner has rights only to the unit's interior space. All other spaces are controlled by the condo owners’ association. Each unit owner automatically becomes a member of the condo association, according to the association’s governing documents. The condominium declaration describes clearly what part of the condominium space is an owner’s "unit" and what parts make up the "common elements." Often, the unit comprises the actual walls, floors and ceilings themselves and any other feature, wherever located, which serves only the unit, such as the outside air conditioning unit.

Perhaps the biggest difference in the way a condo is owned compared to a conventional home is the limited amount of control a condo owner has compared with that of a regular homeowner. Generally, a condo owner has as much freedom inside the condo as a homeowner, but outside the home, the condo owner has much less freedom. Condo associations generally can regulate virtually every aspect of what happens outside unit walls, and sometimes inside the walls. Condo associations can make rules about everything from what kind of flowers owner’s plant to how many cars owners can park in their driveway. These rules ensure the uniformity of the condo’s appearance, which generally helps to keep property value high.

Generally, the condo association controls all of the land and property surrounding individual condominium units, and manages the condo property through a board of directors. The board of directors is elected by the unit owners to run the condo's daily operations. The unit owners elect board members according to the condo's bylaws. Usually, each unit has one vote, but some condos use the value or size of an individual unit to calculate that unit’s voting power.

The board can enact budgets, levy assessments and enforce the declaration, bylaws and rules of the condo. Board members act as point persons for unit owners and can adjudicate disputes between neighbors if the declaration allows. The board also has the right to make rules and manage the common elements and to grant permission to alter a limited common element.State law dictates what a board may not do.

Individuals owning and operating condos should have a working understanding of the Association's declaration, bylaws and rules. If it is a new condominium unit, the developer’s disclosure statement will be replete with valuable information. All parties should also have regular knowledge of the Association's most recent budget and financial statements to determine  its financial condition. In particular, unit owners and Board members will want to know that its cash reserves are sufficient to meet future maintenance and operational needs.

In the residential context, the difference between a “condominium” and an “apartment” complex is purely legal. There is no way to differentiate a condominium from an apartment simply by looking at or visiting the building. What defines a condominium is the form of ownership. The same building developed as a condominium (and sold in individual units to different owners) could actually be built at another location as an apartment building (the developers would retain ownership and rent individual units to different tenants). As a practical matter, builders tend to build condominiums to higher quality standards than apartment complexes because of the differences between the rental and sale markets.

Technically, a condominium is a collection of individual units and common areas along with the land upon which they sit. Individual ownership within a condominium is construed specified by a legal document known as a Declaration, filed on record with the local governing authority. Typically, these boundaries will likely include the wall surrounding a condo, allowing the homeowner to make some interior modifications without impacting the common area. Anything outside this boundary is held in an undivided ownership interest by an Association corporation established at the time of the condominium’s creation. The corporation holds this property in trust on behalf of the homeowners as a group–-it may not have ownership itself. The condominium is distinguished from other types of joint or common ownership because of the three separate parts that make up the condominium. The first part is the exclusive ownership of the single condo unit; the second part is the notion that a unit owner also owns an
undivided interest with other unit owners in the “common elements,” which interest cannot be separated from the unit; and the third part an agreement or schematic amongst owners for the management and administration of the total condominium property. See Fla. Stat. § 718.104. As
we will address further infra, Condominiums have conditions, covenants, and restrictions, and often additional rules that govern how the individual unit owners are to share the space as well as use their owned unit space. The three parts are essential to the existence of a Florida
condominium legally existing. Id. When all three elements are met as required by the Florida Condominium Act and a declaration of condominium is recorded in the county where the condo property is located, a condo has been created. Id. Although the use of the terms condominium, condominium unit and condominium association are often colloquially used with fungibility, they do have very specific definitions and interpretations in law.

1 Excerpts of certain sections of these materials were taking from the following sources: 11 Peter M. Dunbar, The Condominium Concept (2008-09); Florida Condominium and Community Association Law (2007-08); Understanding Condominium Association Powers to Govern Well, the Condominium Association Must Be Endowed with the Proper Powers., Prac. Real Est. Law., July 2003, at 47.

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