There are so many ways a developer can build a community:
- The developer can build separate buildings but record only one declaration of condominium that all units are governed by. In that case, there would be only one condominium and only one condominium association.
- The developer can build multiple buildings, make each one a separate condominium, and create a separate condominium association for each building.
- The developer can build multiple buildings, make each one a separate condominium, but have all the buildings governed by only one board of directors and one condominium association. This is called a multi-condominium. It simply means one condominium association being responsible for more than one condominium.
There are far more multi-condominiums than there should be. They are difficult to manage and often times misunderstood. Some basics:
- There is only one board of directors because there is typically one association. However, there may be an additional master association.
- Each specific condominium must have its own annual budget. The budget gets passed by the board. However, only the people who own in that specific condominium get to vote on waiving reserves in the budget. Furthermore, included in each condominium’s budget is a line item for the expenses that all of the condominiums share for any shared facilities.
- Each condominium has its own declaration of condominium. This means that one building may make amendments to their declaration that have no effect in neighboring buildings.
- The finances of each condominium must be separately accounted for. This becomes very problematic when all the monies are comingled in one bank account. In fact, , it is possible for one condominium to underfund what their owners must pay, causing other owners in other condominiums to pay their bills. This is why, in a multi condominium, I recommend separate bank accounts for each condominium.
- The expenses of that particular condominium are to be paid solely by the owners in that condominium. For example, should the roof blow off, only the people in that condominium pay to replace it.
It is often times a confusing process to manage a multi-condominium. I have seen the most experienced managers and attorneys struggle with this often confusing concept.
If you are on a Board and hate the multi-condominium concept, there may be hope. Florida Statute 718.110 (6) states:
Notwithstanding any provision of this chapter, an association may operate two or more residential condominiums in which the initial condominium declaration was recorded prior to January 1, 1977, and may continue to so operate such condominiums as a single condominium for purposes of financial matters, including budgets, assessments, accounting, recordkeeping, and similar matters, if provision is made for such consolidated operation in the applicable declarations of each such condominium or in the bylaws. An association for such condominiums may also provide for consolidated financial operation as described in this section either by amending its declaration pursuant to s. 718.110(1)(a) or by amending its bylaws and having the amendment approved by not less than two-thirds of the total voting interests.
If your multi-condo was created after 1977, it is next to impossible to operate as a single condominium. You would have to merge the condominiums and besides obtaining a super-majority vote of the owners, you would need the consent of all lien holders.
Developers would do us all a favor by abandoning the multi-condominium concept.