S.C. from Broward County, Florida writes:
Dear Mister Condo,
If a developer incorporates units as condos, can they later be changed to single family residences? I live in a community that was originally a mix of Single-Family Homes (SFH) and condos. However, the condos were not provided their own governing documents, instead the HOA uses the CC&R’s for SFH. My mortgage company just rejected my homeowner’s insurance policy, because they discovered I needed a condo policy not a HO policy. But HOA is not required to insure the building, they make us both repair/replace entire building and they do not insure it. Is this legal?
Mister Condo replies:
S.C., as you know I am not an attorney so I cannot comment on legal matters. You should definitely speak with a locally qualified attorney for a legal opinion. From what you have told me, the condominium portion of the housing development is governed by the general HOA documents. They wouldn’t necessarily need their own governing documents but there are many issues that condominium owners face that traditional single-family house owners do not. First and foremost are shared wall, ceilings, roofs and other common elements that make up the buildings that house the condominium units. I find it hard to believe that the developer was able to build any condominiums without these issues having been taken into consideration. However, that doesn’t mean it didn’t happen. At the very least, an attorney needs to review the governing documents and make recommendations as to what additional rules and regulations may be needed and if the documents as a whole need to be amended to properly govern the different types of buildings within the association. To be clear, mixed developments such as yours are not uncommon; lack of proper governing documents is very uncommon and could lead to massive lawsuits as time goes by. What will happen when the condominium buildings need new roofs? The Reserve Fund for the HOA is typically the source for that funding. Homeowners who have been contributing for their share of things like association roads and amenities like the pool and clubhouse are not going to want to pay for roofs for the condos when they have to pay for their own roofs. These issues, and many more, need to be addressed in the governing documents. As far as changing the classification of the development from condos to single-family homes, that is quite uncommon and would require a change to the Declaration as well as approval from the local municipality that granted the land use in the first place. It isn’t a simple process. Again, consult with an attorney for a more legal answer and likelihood of success if the association decides it would like to pursue that remedy. Either way, good luck!