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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.
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