Florida Statute 719 regulates residential cooperative apartments. This law sets some broad standards that you must adhere to. Individual cooperatives may vote and pass any legal rules and regulations requested by the membership. You should read all the co-op documents and current financial statement before you purchase a unit.
A co-op apartment building is owned by a corporation, and the owners of the units are the shareholders of that corporation. The shareholders have an undivided share in the assets of the association. Florida doesn't regulate the specific type of ownership, and it differs among the various corporations. In some cooperatives, the shareholder receives a share of stock and nothing else; in others, the owner may also receive a proprietary lease or occupancy agreement. Regardless, the co-op's board of directors must always approve the transfer or lease of any unit.
Buying a co-op can be difficult. Some buildings require that transactions are in cash with no financing. Since there is no deed to individual apartments -- only to the building -- lenders may have the buyers sign a recognition agreement that grants the lender rights in case of default. If the co-op doesn't allow this agreement, the lender may fund an "unrecognized" loan and accept the property as collateral. You'll want to work with a loan originator who has experience in co-op loans.
Florida law requires that the election of board members takes place at the annual shareholder meeting, unless a co-op's bylaws establish another schedule. The electoral process is by written ballot or a voting machine and proxies are impermissible; proxy voting is only applicable for other matters. Board meetings are open to all unit owners who may speak about any agenda item, and the sessions may be recorded. The board must post a meeting notice 48 hours in advance -- except in an emergency.
The law states that the board is responsible for planning a budget, issuing a yearly financial statement and ensuring that the building has adequate insurance coverage. The board has the power to levy special assessments if money is necessary to maintain common areas. The books and records of the association must be available within five days of receiving a written request from any unit owner. The board has 30 days to respond to any other written inquiry by an owner, which goes out via certified mail.
The association can charge quarterly maintenance fees and special assessments, and it has the right to record a lien on a parcel for nonpayment of the debt. The association has one year to initiate foreclosure or the lien expires. If the unit has a tenant, the association can make a written demand that future rent payments go to the association, and the tenant must comply or face eviction.
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