P
roperty

O
wners'
A
ssociation

Proposed Revisions to SECTION 190.048, F. S.
To Strengthen Disclosure Rules
For the Sale of Real Estate in
Community Development Districts (CDDs)



The current disclosure language given to buyers at the time of home purchase in a CDD is in Section 190.048 Florida Statutes. The section is inadequate and should be revised. Revisions should apply to any sale of a CDD property by a developer or its agents. There are several issues that need to be part of a comprehensive Disclosure Reform bill as follows:

1. Timing of Disclosure - The currently-required Disclosure is often given to potential buyers too late in the buyer's decision-making process, or often delayed until the time of closing, or afterwards. The Disclosure should be given to a prospective purchaser: (a) no less than ten (10) business days prior to closing; or, (b) at an earlier date when the buyer first exhibits serious interest in a property; and, (c) updated at least three (3) business days prior to closing.

2. Receipt for Disclosure - Buyers often complain that the currently-required Disclosure was never given or was delivered after closing. A developer or its agents should be required to obtain a signed and dated receipt from a potential buyer indicating when the Disclosure was delivered.

3. Separate Sheet of Paper - The currently-required Disclosure is often buried in other lengthy closing documents. The Disclosure should be on separate sheets of paper, clearly identified.

4. Dollar Specifics - The currently-required Disclosure is not comprehensive and specific as to dollar amounts. The Disclosure should contain reasonable estimates of the dollar amounts for the first three (3) years for each tax, assessment, and/or monthly fee. Any bond obligations to be assumed by individual residents, the related interest rates, and repayment options should also be identified.

5. Undisclosed Liabilities - Any significant underfunded or unfunded liabilities of a CDD, potentially to be paid by residents within the next ten (10) years, should be identified, explained, and fully disclosed.

6. Special Agreements - Any agreement between a developer, a district, and/or any other party, which could have a current or potential significant financial impact on current or future residents in the district within the next ten (10) years, should be identified, explained, and fully disclosed.

7. Covenants and Restrictions - These details applying to the property should be fully listed and explained to a layman's understanding.

8. Disclosure of Problems - The Disclosure should specifically disclose the presence or operation of any of the following within a ten (10) mile radius of the property of interest to a potential buyer: Railroad tracks, land fill, garbage dump, garbage transfer station, stone or sand quarry, cement plant, power plant, electrical substation, sewer treatment facility, fertilizer processing plant, animal slaughter facility, school athletic facility.

9. Procedures to Follow - Many complaints in the past refer to sellers or sales agents not following proper procedures, or, at the worst, actually misleading prospective buyers on disclosure issues. The Statute should require specific disclosure and compliance as indicated herein by sellers and/or sales agents.

10. Noncompliance Fines - These requirements for specific disclosure and compliance are substantially weakened if a penalty fine is not specified and enforced. The Statute should specify a penalty fine of at least $2,500.00 for each violation of these Disclosure requirements to be paid within thirty (30) days by a violator to a prospective buyer affected by a violation upon notice of the violation from the prospective buyer. The total fine shall double each thirty days until paid up to a maximum of $10,000.00. Any legal, court, discount, or collection fees required to accomplish the collection of a fine shall also be paid by the violator above and beyond the previously mentioned $10,000.00 maximum.

11. Annual Reporting - Developers and commercial sales agents should be required to submit an annual report summarizing their compliance with these Disclosure requirements, any instances of non-compliance, and detailing the payment of any required fines, under penalty of a separate $50,000.00 fine and any other criminal penalties identified by the Florida State Legislature for non-compliance with any part of this annual reporting requirement.








The POA Disclosure Reform Bill



The Disclosure Reform bill suggested by the POA in past years has been submitted to the 2007 session of the Florida Legislature by our friends at the Cyber Citizens For Justice, Jan Bergemann, President. The bill has been put into proper format and is now being considered. The original bill may not survive in its original form, if at all. However, this is a start. And, we need Villagers and POA members to support this bill by contacting our local Legislators.

In the House the bill number is bill number H 1373, sponsored by Representative Julio Robaina. In the Senate it is bill number S 2816, sponsored by Senator Alex Villalobos.

You can review the whole bill at: http://www.ccfj.net/PB07HB1373.html. If you click on CDD, the link will take you directly to the Disclosure Reform language.

In essence, the bill requires that:

- A Disclosure notice be given to purchasers of property in a CDD,
- The notice be on a separate sheet of paper,
- The name of the CDD be disclosed,
- Disclose that taxes or assessments can set annually by the CDD,
- These may be in addition to other taxes and assessments,
- The covenants and restrictions be disclosed,
- The additional taxes and assessments with 10 years be disclosed,
- A reasonable estimate of first 3 years of taxes and assessments be given,
- The disclosure be given within 10 days of the date of the purchase contract,
- Violations to be punished by fines of $2,500 per violation,
- Violation fines to be capped at a maximum of $10,000,
- Developers shall submit an annual report,
- Failure to submit annual report will incur up to a $50,000 fine.

Please contact our local Legislators and request that they support this legislation:

Senator Carey Baker
Representative Hugh Gibson






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