The developer of a condominium was supposed to pay their share of fees for units that were declared but not yet built. The developer argued that they only had to start paying once the units were actually sold. This led to a lawsuit which the court misunderstood the condo laws. The developer didn’t pay their share of fees for the units they agreed to build, so the state government told them to explain why they shouldn’t be punished. The government decided that the developer had to pay the fees from the time they said they would build the units until they actually sold them. The developer didn’t like this decision and appealed to a higher court, which said that the developer didn’t have to pay the fees until the units were actually built. Okay, so the question is whether a developer has to pay fees for units in a condo that haven’t been built yet. The court said they didn’t have to because the units didn’t exist until they were built. But the law actually says that the units exist as soon as the condo declaration is filed, even if they’re not built yet. So the developer does have to pay fees for those units. The court also misunderstood what the property actually is – it’s not just empty land, it’s the air space where the units will be. The RIS decision has caused problems for owners of built and C.O.’d condominium units. The decision changed the ownership and sharing formula for common expenses without the approval of the unit owners, which goes against the condominium act. This is important to understand because a condominium is a form of property ownership that is regulated by state laws. This decision has caused a conflict with the existing laws and may have long-term effects on condominium owners. A condominium property has units that are privately owned and common elements that are shared by all the unit owners. Each unit has a share of ownership in the common elements, which is either a fraction or a percentage. You can only find out if a property is a condominium by checking public records. The total shares in the common elements for all the units must add up to 100 percent. Condominium properties can look like many different types of buildings or land, but they all have these key elements. Once you buy a condo, you have to pay your share of the costs for things like maintenance and repairs. The only exceptions are if everyone in the condo building is also excused from paying, or if the developer has a special agreement.
The developer can be excused from paying for a certain period of time, but they still have to pay if the costs are higher than what other owners are paying. The developer can also be excused if they guaranteed in the sales contract that the costs won’t go over a certain amount, and they have to pay any extra costs themselves. If the developer is excused from paying certain fees to the homeowners’ association, any money collected from unit owners can only be used for regular expenses until the developer’s excuse period is over. This includes money collected at the time of purchase. In simple terms, Florida’s condominium laws say that developers have to start paying for the costs of the condo as soon as the declaration is recorded. The court decision in the RIS case doesn’t follow these laws, and if it’s not fixed, it could cause a lot of confusion and problems for condo developers and associations. Gary A. Poliakoff is a lawyer at a firm in Ft. Lauderdale.
Source: https://www.floridabar.org/the-florida-bar-journal/the-phantom-of-the-condominium/
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