Chapter 8 Section 4

Question 1

ownership of airspace (condos)

Answer 1

-each owner owns a three dimensional airspace within the building and has title to the airspace within the walls, floor, and ceiling of each unit

Question 2

fractional shares of common areas

Answer 2

-the ownership of each condominium unit includes fractional ownership of the common areas
-building is a common element along with the hallways, elevators, sidewalks, parking lots, driveways, landscaping, and recreational facilities

Question 3

master insurance policy

Answer 3

-a master insurance policy insures the common areas and protects individual owners against lawsuits that may arise from accidents that occur in common areas
-individuals must provide their own coverage for the interior of the unit and personal property

Question 4

ownership and default

Answer 4

-each condo is mortgaged, taxed, and sold independently of other units
-in the event of default by a unit owner, the individual condo unit is foreclosed and the unit is sold without affecting other units

Question 5

disclosures

Answer 5

-any contract for the sale of a condo must contain certain disclosures with specified language regarding the rights of the parties
-failure to include disclosures allows a party to void the agreement

Question 6

declaration

Answer 6

-developers of condominiums must file a declaration to create a condo association and execute a master deed that conveys the title to the association
-declaration includes: name of association, legal description and survey of land, description of unit owner’s membership rights and obligations, copy of bylaws,

Question 7

rescission periods

Answer 7

-should the documents previously mentioned be requested by the buyer in writing and not provided by the seller, the agreement is voidable
-new condo buyers are allowed a 15 day right of rescission following receipt of the above condo documents from the developer
-resale condo buyers are allowed 3 business days from the date of receipt of these documents to either rescind the transaction or proceed with sale

Question 8

cooperative ownership (co-op)

Answer 8

-a corporation that buys and owns a multiple-unit building
-shares of stock are sold to individuals who in turn are given a proprietary lease by the corporation
-individual stockholders divide the operating expenses and mortgage payments proportionally based on the number of shares of stock they own
-if a co-op shareholder fails to meet financial obligations, the remaining shareholders must make up the shortage or the corporation is in default

Question 9

cooperative act F.S 719

Answer 9

-provides for real property taxes and special assessments to be levied against individual units rather than the corporation

Question 10

benefits of co-op

Answer 10

-may deduct their share of real estate taxes and mortgage interest from their personal income taxes
-may realize equity buildup in the property due to reduction of the mortgage debt

Question 11

rescission periods

Answer 11

-the same rescission periods that apply to condos apply to co-ops

Question 12

interval ownership (timeshares)

Answer 12

-timeshare is initially organized as a condominium
-each condo is then further divided into time periods, typically 50 one-week time periods per year are sold to individuals

Question 13

fee simple ownership of timeshare

Answer 13

-conveys title in fee simple to purchaser as a tenant in common with the other timeshare unit owners
-purchaser receives a deed for the unit purchased, combined with a use agreement, which specifies the week or weeks of the year in which the purchaser can occupy the unit

Question 14

tenancy for years ownership of timeshare

Answer 14

-tenancy for years converting to tenancy in common after a specified number of years (usually 20-40)

Question 15

timeshare waiver

Answer 15

-waiver prevents the owner of a timeshare from forcing the sale of the entire unit
-each owner is responsible for the payment of their share of the real estate taxes and maintenance

Question 16

Florida Timeshare Act F.S 721

Answer 16

-enacted in 1981 to regulate industry and to help prevent fraud and deceptive sales practices
-developers and sellers must provide a copy of sales contract to purchaser which must contain info regarding charges for reservations, maintenance, and management
-timeshare public offering statements must be provided to each purchaser and must be filed w state of Florida
-all advertising must be filed with Florida
-all contracts for resale must clearly define the rights and obligations of all parties
-name and address of managing entity of timeshare plan, disclosure of closing costs, and statement that discloses the existence of any mandatory exchange program must be provided
-10 day cooling off period to cancel contract

Question 17

managing condos, co-ops, and timeshares

Answer 17

-a salaried manager of a condo, co-op, or timeshare is required to have a CAM license
-services include:
-controlling or disbursing funds
-preparing budgets, or other financial documents
-assisting in the noticing or conducting of meetings
-coordinating maintenance and other day-to-day services involved with operations of a community association

Question 18

HOA

Answer 18

-a Florida corporation responsible for the operation of a community or mobile home subdivision in which the voting membership is made up of property owners
-HOA membership is a mandatory condition of property ownership
-HOA is authorized to impose assessments that, if unpaid, may become a lien on the parcel

Question 19

HOA must maintain records that include:

Answer 19

-plans, specifications, permits, and warranties related to common area improvements or other property maintenance
-association bylaws
-articles of incorporation of the association
-declaration of covenants
-association rules
-board of directors meeting minutes for past 7 years
-member roster with mailing addresses and parcel identifications
-association insurance policies for past 7 years
-association contracts and bids
-tax returns and accounting records for past 7 years