HOA basics for Florida buyers

Buyers from states where an HOA is unusual tend to treat the association documents as closing paperwork. In Florida they are the terms of how you will be allowed to use the property, they are enforceable, and the legislature has gone to the trouble of writing you a specific warning.

The warning the statute makes somebody hand you

Section 720.401 of the Florida Statutes requires that a prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale, in a form substantially similar to the one the statute sets out. Its numbered paragraphs say, in capitals:

• you will be obligated to be a member of a homeowners' association;
• there have been or will be recorded restrictive covenants governing the use and occupancy of properties in the community;
• you will be obligated to pay assessments to the association, which may be subject to periodic change;
• you will also be obligated to pay any special assessments imposed by the association;
• and the governing documents are public records obtainable from the county.

The statute also provides a contract cancellation right where that disclosure was not given. It is time-limited and it does not survive closing. So the useful version of this knowledge is: notice on the day you sign whether you were handed it, rather than discovering months later that you should have been.

What to read, in the order that matters

You are entitled to the governing documents. Read them in this order, because they answer questions in descending order of how much they can cost you.

1. The budget and the reserves. The monthly fee is a symptom. The budget is the diagnosis. What does the association spend money on, what does it insure, and what is in reserves against the roof, the road, the pool, the gate? A community with a low fee and no reserves is not cheaper. It is a community whose special assessment has not been declared yet.

2. The declaration of covenants. The rules that bind the land. Read for the things you actually intend to do: park a work van or a boat or an RV, run a business from home, put up a fence or a shed, plant or remove a tree, rent the house out, keep animals, paint it a colour. If the declaration bans something you were planning, the time to know is now.

3. Rental restrictions specifically. Minimum lease terms, caps on the number of rented parcels, waiting periods after purchase, board approval of tenants. If any part of your plan involves renting the property out, this section is the whole deal.

4. Meeting minutes for the last year or two. This is the one people skip and it is the most informative document in the pile. Litigation, an insurance renewal that went badly, a construction defect argument, a board that is at war with itself — none of it appears in the budget and all of it appears in the minutes.

5. Insurance on common elements. Association property insurance has moved sharply in Florida. It is paid out of your assessments, and where it has risen steeply, your assessments follow it.

Estoppel, at closing

Before closing on an association property, the closing agent orders an estoppel letter: the association's written statement of exactly what is owed on the parcel as of the closing date — regular assessments, special assessments, fines, and fees. Florida law caps what an association may charge to produce one and sets a deadline for producing it.

This is what stops you inheriting the previous owner's arrears, and an association closing does not happen without it. It appears as a line on the settlement statement; see Florida closing costs explained.

What an association can actually do to you

Worth being plain about, because it varies a lot by state and Florida is at the firmer end:

• Levy assessments, regular and special, and increase them within the procedure the documents set out.
• Fine for covenant violations, within the statutory process and limits.
• Lien the parcel for unpaid assessments, and in some circumstances foreclose on that lien.
• Approve or refuse architectural changes, where the documents give an architectural committee that power.

Against that, Chapter 720 gives owners rights too: to inspect official records, to notice of meetings, to vote, to run for the board, and to the procedural protections the statute attaches to fines and enforcement.

Deed restrictions without an association

A great deal of Marion County is deed restricted with no HOA, which confuses people arriving from suburban markets where the two always travel together.

Recorded covenants run with the land and bind you whether or not anybody is organised to enforce them. What differs is enforcement: without an association there is no board, no assessment, no lien, and enforcement falls to neighbouring owners through the courts — which mostly means the restrictions sit there unless somebody cares enough to sue.

The practical consequence cuts both ways. Nobody is going to fine you over a fence colour. Nobody is going to stop your neighbour either. A future buyer's attorney will still find the covenants in the title work, and a lender may still care.

That distinction deserves its own page, and deed restrictions vs an HOA is on the plan for a later batch.

Before you waive anything

1. Ask whether there is an association before you write the offer, not after. The Property Appraiser's parcel record will tell you the subdivision.
2. Get the disclosure summary the statute requires, and notice whether you got it.
3. Get the full document package and give yourself real time to read it, including the minutes.
4. Read the budget and the reserves before you look at the fee.
5. Check the rules against your actual life, not against a generic idea of what HOAs do.
6. Ask about any pending special assessment or litigation in writing.

None of this is exotic and all of it is easier before the contract than after.