Tag: Florida Condominium and Homeowners’ Associations Fees

When it comes to running a homeowners association or condominium and all of the upkeep and operations associated with these types of properties, it is important to understand the ins and outs of insurance coverage and liability.

For example, “bare walls” insurance plans are often discussed in associations that want to limit the cost of water damage claims because each owner (versus the homeowners association) restores their own unit interior (including cabinets, walls, and floor coverings, as well as other interior finishes).

What Is “Bare Walls Coverage”?

“Bare walls” coverage is a type of insurance coverage purchased by condo or homeowners associations which typically applies to communally-used features in buildings (such as entryways). Associations typically use costs that they charge in HOA fees to cover this type of insurance policy. However, it is the most limited type of coverage that an association can purchase. Individual unit owners are required to purchase their own insurance to cover anything that is damaged within their units (for example, toilets, appliances, etc.).

There are some key differences when it comes to the management of condominium versus homeowners associations in Florida. For example, this includes the ability to charge capital contribution fees, or the one-time charges associated with any transfer of title part of the association. For Florida homeowners’ associations, these fees typically range from $400 to $5,000, and are charged in order to ensure that there are finances in the association’s’ operating account (or capital reserves) once the developer leaves. These fees usually cover between one and three months of the association’s annual assessment amount.

In general, while condominium associations face certain restrictions when it comes to fees like these, homeowners’ associations, conversely, can charge these fees to new owners and/or to process lease applications.

The Condo and Homeowner’s Association Law in Florida

Under Florida law, the state legislature must first approve any fees charged to owners and tenants when it comes to condo associations. While developers can charge these fees to the original purchasers, they can no longer charge them once turnover has occurred. Thus, for example, fees associated with processing a lease or sales application, or transfer fees, cannot exceed $100 per applicant (other than a husband/wife or parent/child, both of which are considered to be one applicant).