Association law


Association law

Association law is a term used in the United States for the law governing homeowner associations and related organizations.

Real estate developers often choose to maximize residential construction to clusters of residences within real property parcels. Many people purchase their residence within an association for reasons such as location along beaches and other areas, amenities, uniformity of appearance and other particular benefits or reasons.

Associations are registered by the developer of the community as a not-for-profit corporation, which form of corporation is also governed by particular statutes.

The legal forms of residential associations include homeowner associations, condominium associations, cooperative associations and mobile home associations. Thus, state laws are enacted to address specific types of associations applicable to the type of communities and relationships between the governing association and its constituents.

Florida law

In Florida, for example, there are statutes under Ch. 718, "The Condominium Act", Ch. 719, regarding Co-Operative ownership, Ch. 720, governing Homeowner Associations, and Ch. 721, controlling laws for Mobile Homes. The laws for such associations continually evolve to address important legal and socioeconomic matters. "2007: Problems Still Unsolved", "Legal Beat", Fall 2006, by Eric M. Glazer, Esq.

Deed restrictions apply to purchasers of residential interests within such communities pursuant to a recorded Declaration, By-Laws, Covenants and Restrictions and/or Rules and Regulations for the particular community. Associations and all owners therein are subject to state statutes enacted for the particular form of community. Thus, compliance with such restrictions is mandatory and will be enforce by an applicable court of law and/or arbitration unless such restrictions are declared to be invalid or otherwise illegal.

Associations are also required to comply with applicable laws concerning structural and other components of the condominium or other applicable building to help ensure the safety of owners. "40 Year Recertification", Legal Beat, Fall 2007, by Andrew C. Demos, Esq.

Once the developer arrives at a certain percentage of sales or permanent leasing of units within the association, the developer is statutorily required to transfer control of the association to owners other than the developer including control of a majority of the board of directors and delivery of financial records, all association records and all association property. "E.g.", Fla. Stat. sec. 718.301(1).

Particular laws apply to financial requirements, construction defects and other matters concerning the developer of associations with applicable deadlines and various statutes of limitations. "E.g.", Fla. Stat. sec. 718.301(4)(c)(90 day deadline following turnover of control for the developer of a condominium to pay for and provide an independent audit of the financial records); "e.g.", Fla. Stat. sec. 718.203(developer warranties). Even a conversion of an older building to condominium can subject the developer to providing warranties to its owners. "E.g.", 718.618(6). Thus, following the transition of the association from the developer to unit owners other than the developer, the board of directors has the exceedingly important task of timely evaluating same through expert and legal advice.

There is a growing trend for developers to choose to construct or convert buildings to non-residential commercial offices. ["Commercial Real Estate Developers Go Condo", Articles Tree, Joe Hanoa, September 25, 2006] One of the reasons for this growth in popularity is that the residential market is cooling with slower sales, high levels of investment ownership and high levels of supply.

References


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