Condominiums and land subdivisions are both ways that people own real property, but the laws governing the way a person takes ownership are very different and there are oftentimes hidden legal defects of ownership of which many condominium owners are completely unaware. Unlike lands that have been subdivided by a plat and which are placed under strict scrutiny prior to being recorded in the Public Records, a condominium plot plan is oftentimes a hodgepodge of drawings that are stuck behind a declaration of condominium. All too often title companies, underwriters, owners, realtors and lenders simply assume that the documents are fine and they proceed to closing blissfully unaware that the legal description on the deed does not reflect an actual condominium unit. Surely, these plot plans are reviewed and scrutinized by some government entity, right? The short answer is sometimes yes, and sometimes no.
Let’s start at the beginning, the condominium form of ownership is basically a “new” concept and the first federal law authorizing the Federal Housing Commission to insure condominiums was enacted in 1961. Florida passed the first condominium statutes in 1963. Those statutes have been expanded and modified throughout the years and are now an extensive set of laws found under Chapter 718 of the Florida Statutes. These laws are commonly referred to as the “Florida Condominium Act” or the “Act”.
The Act contains all of the requirements of how a condominium is formed and how it can be sold and it even extends to requiring the formation of an association to govern the operation of the condominium. The Act dictates that a condominium is formed through a declaration of condominium which must contain certain provisions such as how many buildings are in the whole condominium, how many units there are, what are the common elements, the granting of easement between units for utilities, etc. The declaration also must have a plot plan attached that shows all of the buildings and units and common elements and where everything is located. Each item must be properly labeled. The plot plan is very similar to a plat that shows where a lot is located in a subdivision and where are all of the streets. The declaration, along with the plot plan (and other items) are recorded in the Public Records in the county where the condominium is located. The legal description for a particular condominium unit within the newly created condominium would be something like, “Unit 1, of New Condo, according to the Declaration of Condominium recorded at Official Records Book 1111, Page 222 of the Public Records of Any County, Florida.
Much like a property subdivision that must be submitted and approved by the county, a declaration of condominium and the plot plan (and various other documents) must be submitted to the Division of Florida Condominiums, Timeshares and Mobile Homes, in Tallahassee (usually referred to as the “Division”), where it is reviewed for legal compliance. This can be a long back and forth process of submission, review, revision, and re-submission, over and over until approved. Once approved the declaration of condominium can be recorded in the Public Records and the units can thereafter be sold. However, there is a loophole to the submission process, if the Division does not respond with any required corrections (referred to as “deficiencies”) within 45 of the initial filing, then the filing is deemed as correct and accepted and the declaration of condominium can be filed in the Public Records. Even if the declaration and plot plan contain incorrect or insufficient information!
During the boom time of the early 2000’s when condominiums were exploding in popularity and condominium conversions where commonplace, the Division was receiving over 200 filings of condominium documents a month. This, compared to an average of 200 filings a year during a normal period. There was no way to keep up with the volume, and condominiums were being approved by default at a record pace (this writer, as a condominium developer attorney, experienced numerous approved-by-default condominium filings). Not all approved-by-default condominiums have issues, especially if an experience attorney or developer took the time to ensure that there were no issues prior to recording. But that was not always the case, and many times documents were filed that clearly had issues that should have been corrected but were not because there was no oversight. I have personally seen plot plans which were comprised of building plans that were simply cut up and placed behind the declaration of condominium. You couldn’t tell where any buildings, units or parking lots were located (this was a small condominium and has been since corrected).
Bad condominium documents are not the only issue. We experienced a recent issue in which a very large, multi-building condominium, had incorrect legal descriptions on some (but not all) units, dating back for decades. The condominium had buildings labeled “A”, “B”, “C” and so on. Within each building were specific units, labeled “1”, “2”, “3” and so on. At the time the units were being sold, some of the legal descriptions were done correctly so that the legal description would say “Unit 1 of Building A of XYZ Condominium…”. But some of the legal descriptions were incorrect and they stated “Unit A of Building 1 of XYZ Condominium…”. These incorrect legal descriptions have been used each and every time those units have been sold and resold. It may seem that logically Unit A is actually Unit 1 and Building 1 is actually Building A, but this conclusion is not a legal conclusion and cannot be relied upon in court! (We did not do the closing and advised the people to seek legal counsel.)
Another issue is that some developers who are building side-by-side townhouses, do not want to go through the time and expense of filing condominium documents with the Division, so they don’t. Instead they build one big building in the middle of the lot that may actually consist of two side-by-side connecting units (this writer has seen this done with as many as six connected units). The developer files a “declaration” in the Public Records but this declaration has not been submitted to the Division. In addition, this “declaration” may or may not contain a plot plan. When the developer goes to sell each unit individually, he records deeds that say something like “the East ½ of Lot 1” and “the West ½ of Lot 1”. This is an illegal lot split. There is nothing the county can do to prevent the recording of the deeds, however, if the owners try to get a permit in the future for any necessary work (like a new roof), the county can deny the permit unit the rogue condominium is properly formed.
So what’s to be done? In every single case, the declaration of condominium should be reviewed by all parties to the transaction and the plot plan should be scrutinized to ensure that the unit is properly depicted. If it is not, and if it can’t be easily fixed, the best advice is to walk away and find another property to purchase (to the seller, you should immediately seek legal counsel).