Florida Regulations 61B-23.003: Transition from Developer Control
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(1) When an association will operate more than one condominium, unit owners other than the developer are entitled to elect no less than one-third of the members of the board of administrators when they own fifteen percent of the units in any one condominium to be operated by the association. The basis upon which unit owners other than the developer are entitled to elect not less than a majority of the board of administrators is determined according to the percentage of units conveyed to purchasers in all condominiums that will be operated ultimately by the association. The developer is entitled to elect at least one member of the board of administrators as long as it holds for sale in the ordinary course of business the percentage of units provided by law in any one condominium operated by the association.
(2) A developer may establish a transition committee or committees to involve unit owners in an advisory capacity with regard to the operation of the condominium prior to assumption of control of the association by unit owners other than the developer. However, establishment of such committee does not relieve the developer from any obligations under Section 718.301, Florida Statutes.
(3) Association funds shall be used only for association purposes and may not be expended for the purposes of the developer, including but not limited to sales and promotional activities, utilities or other costs for construction activities or repair or replacement which is within the warranty obligations of the developer, nor may association personnel be used for such purposes at association expense.
(4) The developer shall pay the costs for the preparation or duplication of the documents required by Section 718.301(4), Florida Statutes, to be provided the unit owner controlled association upon transfer of association control, including the costs and accountant’s fees incurred in preparing the financial statements required by Section 718.301(4)(c), Florida Statutes.
(5) Within 10 business days after the election of the first unit owner, other than the developer, to the board of administration, the developer shall forward to the division, in writing, the name and mailing address of the unit owner board member.
(6) The developer or developer’s agent shall obtain a receipt for transfer of condominium documents to the unit owner controlled association. The receipt shall include a listing of all the items for each condominium operated by the association outlined under Section 718.301(4), Florida Statutes. Said receipt shall contain the date of transfer of the records and shall be signed by both the developer and a non-developer unit owner board member. A copy of said receipt shall be given to the association. Both parties shall retain the receipt for a period of 7 years. Said receipt shall not constitute a waiver of unit owner or association rights with respect to completeness and accuracy of the transfer of condominium documents or preclude administrative remedies available to the division.
(7)(a) For purposes of computing the percentages of units conveyed to purchasers which will entitle unit owners other than the developer to elect not less than a majority of the members of the board of administration, units sold or otherwise transferred in a bulk transfer by the current developer shall be utilized in the above computation for a turnover of control of the association board unless the sale or other transfer is accompanied by an assignment of the developer’s rights to the grantee or transferee. If an assignment of developer rights does not accompany the bulk transfer, in all instances the units sold or otherwise transferred shall be utilized in the computation for a turnover.
(b) As utilized in this rule, the term “”bulk transfer”” means any sale or other transfer of two or more units in one condominium to the same person, including but not limited to units conveyed through foreclosure, deed in lieu of foreclosure or any other transfer or sale, whether voluntary or involuntary.
(c) As utilized in this rule, the phrase “”assignment of developer rights”” refers only to a written agreement whereby the current developer expressly transfers to the grantee or transferee all developer rights and existing obligations under the declaration of condominium, including any exhibits thereto; under Chapter 718, Florida Statutes, including the provisions of Section 718.203, Florida Statutes; and under these rules.
(d) If the transferee or grantee receives an assignment of developer rights, the transferee or grantee shall have the voting rights of the current developer as provided in the declaration, articles of incorporation or association bylaws and the Condominium Act.
(e) If the transferee or grantee does not receive an assignment of developer rights and if the transferee or grantee is not and does not become a developer as defined by Fl. Admin. Code R. 61B-15.007, such transferee or grantee is entitled to vote for a majority of the members of the board of administration.
(f) If the transferee or grantee does not receive an assignment of developer rights and if the transferee or grantee, at the time of such transfer or at a subsequent time becomes a developer as defined by Fl. Admin. Code R. 61B-15.007, such developer is entitled to vote for a majority of the members of the board of administration so long as such developer is offering units for sale in the ordinary course of business as defined in Rule 61B-15.007 and subsection 61B-15.0011(6), F.A.C. If, however, such developer is not offering units for sale in the ordinary course of business as defined in Rule 61B-15.007 and subsection 61B-15.001(6), F.A.C., such developer is not entitled to vote for a majority of the members of the board of administration.
(g) If during the time such developer, pursuant to the provisions of paragraph (f) of this rule, is entitled to vote for a majority of the members of the board of administration, such developer is responsible for any violation of the Condominium Act or these rules by the association committed during the time such developer controls the association by voting more than 50 percent of the voting interests of the association. Further, such developer shall provide the association with an audit of the association financial records in the manner provided in Section 718.301(4)(c), Florida Statutes, and Fl. Admin. Code R. 61B-22.0062, for the period such developer controls the association regardless of the fiscal period required by subsection 61B-22.0062(1), F.A.C.
(8) In accordance with Section 718.301(1)(d), Florida Statutes, after turnover of control of an association, the developer who relinquishes control may vote in the same manner as any other unit owner. However, the relinquishing developer may not vote for a majority of the board of administration; nor shall the developer vote on matters for which a vote of unit owners other than the developer is allowed or required by Chapter 718, Florida Statutes, or by division rules. For example, the developer may not vote its interests in determining whether to cancel an association agreement under Section 718.302, Florida Statutes.
(9) In condominiums created on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board of administration not later than 7 years after recordation of the declaration. In the case of an association which may ultimately operate more than one condominium, where the initial condominium operated by the association is created on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board not later than 7 years after recordation of the declaration of the initial condominium. In the case of a phase condominium created pursuant to Section 718.403, Florida Statutes, where the declaration submitting the initial phase or phases is recorded on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board not later than 7 years after the recordation of the declaration submitting the initial phase or phases.
Specific Authority 718.301(6), 718.501(1)(f) FS. Law Implemented 718.111(1), 718.301 FS. History-New 7-22-80, Amended 3-18-82, 8-31-83, 5-21-84, 10-1-85, Formerly 7D-23.03, Amended 1-27-87, 4-1-87, 3-21-89, 4-1-92, 7-11-93, Formerly 7D-23.003, Amended 1-19-97.
Terms Used In Florida Regulations 61B-23.003
- Deed: The legal instrument used to transfer title in real property from one person to another.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
(3) Association funds shall be used only for association purposes and may not be expended for the purposes of the developer, including but not limited to sales and promotional activities, utilities or other costs for construction activities or repair or replacement which is within the warranty obligations of the developer, nor may association personnel be used for such purposes at association expense.
(4) The developer shall pay the costs for the preparation or duplication of the documents required by Section 718.301(4), Florida Statutes, to be provided the unit owner controlled association upon transfer of association control, including the costs and accountant’s fees incurred in preparing the financial statements required by Section 718.301(4)(c), Florida Statutes.
(5) Within 10 business days after the election of the first unit owner, other than the developer, to the board of administration, the developer shall forward to the division, in writing, the name and mailing address of the unit owner board member.
(6) The developer or developer’s agent shall obtain a receipt for transfer of condominium documents to the unit owner controlled association. The receipt shall include a listing of all the items for each condominium operated by the association outlined under Section 718.301(4), Florida Statutes. Said receipt shall contain the date of transfer of the records and shall be signed by both the developer and a non-developer unit owner board member. A copy of said receipt shall be given to the association. Both parties shall retain the receipt for a period of 7 years. Said receipt shall not constitute a waiver of unit owner or association rights with respect to completeness and accuracy of the transfer of condominium documents or preclude administrative remedies available to the division.
(7)(a) For purposes of computing the percentages of units conveyed to purchasers which will entitle unit owners other than the developer to elect not less than a majority of the members of the board of administration, units sold or otherwise transferred in a bulk transfer by the current developer shall be utilized in the above computation for a turnover of control of the association board unless the sale or other transfer is accompanied by an assignment of the developer’s rights to the grantee or transferee. If an assignment of developer rights does not accompany the bulk transfer, in all instances the units sold or otherwise transferred shall be utilized in the computation for a turnover.
(b) As utilized in this rule, the term “”bulk transfer”” means any sale or other transfer of two or more units in one condominium to the same person, including but not limited to units conveyed through foreclosure, deed in lieu of foreclosure or any other transfer or sale, whether voluntary or involuntary.
(c) As utilized in this rule, the phrase “”assignment of developer rights”” refers only to a written agreement whereby the current developer expressly transfers to the grantee or transferee all developer rights and existing obligations under the declaration of condominium, including any exhibits thereto; under Chapter 718, Florida Statutes, including the provisions of Section 718.203, Florida Statutes; and under these rules.
(d) If the transferee or grantee receives an assignment of developer rights, the transferee or grantee shall have the voting rights of the current developer as provided in the declaration, articles of incorporation or association bylaws and the Condominium Act.
(e) If the transferee or grantee does not receive an assignment of developer rights and if the transferee or grantee is not and does not become a developer as defined by Fl. Admin. Code R. 61B-15.007, such transferee or grantee is entitled to vote for a majority of the members of the board of administration.
(f) If the transferee or grantee does not receive an assignment of developer rights and if the transferee or grantee, at the time of such transfer or at a subsequent time becomes a developer as defined by Fl. Admin. Code R. 61B-15.007, such developer is entitled to vote for a majority of the members of the board of administration so long as such developer is offering units for sale in the ordinary course of business as defined in Rule 61B-15.007 and subsection 61B-15.0011(6), F.A.C. If, however, such developer is not offering units for sale in the ordinary course of business as defined in Rule 61B-15.007 and subsection 61B-15.001(6), F.A.C., such developer is not entitled to vote for a majority of the members of the board of administration.
(g) If during the time such developer, pursuant to the provisions of paragraph (f) of this rule, is entitled to vote for a majority of the members of the board of administration, such developer is responsible for any violation of the Condominium Act or these rules by the association committed during the time such developer controls the association by voting more than 50 percent of the voting interests of the association. Further, such developer shall provide the association with an audit of the association financial records in the manner provided in Section 718.301(4)(c), Florida Statutes, and Fl. Admin. Code R. 61B-22.0062, for the period such developer controls the association regardless of the fiscal period required by subsection 61B-22.0062(1), F.A.C.
(8) In accordance with Section 718.301(1)(d), Florida Statutes, after turnover of control of an association, the developer who relinquishes control may vote in the same manner as any other unit owner. However, the relinquishing developer may not vote for a majority of the board of administration; nor shall the developer vote on matters for which a vote of unit owners other than the developer is allowed or required by Chapter 718, Florida Statutes, or by division rules. For example, the developer may not vote its interests in determining whether to cancel an association agreement under Section 718.302, Florida Statutes.
(9) In condominiums created on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board of administration not later than 7 years after recordation of the declaration. In the case of an association which may ultimately operate more than one condominium, where the initial condominium operated by the association is created on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board not later than 7 years after recordation of the declaration of the initial condominium. In the case of a phase condominium created pursuant to Section 718.403, Florida Statutes, where the declaration submitting the initial phase or phases is recorded on or after January 1, 1992, unit owners other than the developer are entitled to elect not less than a majority of the members of the board not later than 7 years after the recordation of the declaration submitting the initial phase or phases.
Specific Authority 718.301(6), 718.501(1)(f) FS. Law Implemented 718.111(1), 718.301 FS. History-New 7-22-80, Amended 3-18-82, 8-31-83, 5-21-84, 10-1-85, Formerly 7D-23.03, Amended 1-27-87, 4-1-87, 3-21-89, 4-1-92, 7-11-93, Formerly 7D-23.003, Amended 1-19-97.