Settling and distributing a property titled solely in a decedent’s name during probate can be a complex task. Not all types of properties are subject to probate, as Florida law treats certain types of ownership differently.
In this article, you will discover how co-ops are treated in Florida probate proceedings.
Understanding Florida Co-ops – Are They Equivalent to Condos?
Many Florida residents often mistake the concept of co-ops with condominiums (also referred to as condos.”
Florida Statutes §718.103 (11) defines the term “condominium” as a “form of ownership of real property (…), which is comprised entirely of units that may be owned by one or more persons, and in which there is, appurtenant to each unit, an undivided share in common elements.”
When a person purchases a condo in Florida, he or she owns a “parcel” of the condominium “together with the undivided share in the common elements appurtenant to the unit.”
Conversely, co-ops are not literally “purchased,” as the co-op resident must become a shareholder in the corporation that owns the property. In most cases, residing in a co-op requires approval from a co-op board.
If a person takes out a loan to invest in a Florida co-op, it is not considered a mortgage loan. As long as you want to remain in the co-op, you must abide by certain rules.
Selling the co-op often requires approval from the board, which highlights the fact that the individual residing in the unit does not own the co-op in its entirety.
In most cases, co-ops do not have a positive cost-benefit compared to different forms of property ownership. This fact includes the expenses involved in the process, such as HOA fees, taxes, etc.
Co-op Ownership in Florida – Reviewing the Co-op Agreement
Individuals seeking to invest in a Florida co-op must consult with a seasoned real estate attorney to review the paperwork involved in the transaction, especially the co-op agreement.
It is fundamental to double-check the CC&Rs, which are covenants, conditions, and restrictions that come with the contract’s signature. For example, co-ops often have restrictions against pets or prohibit using the property for rental purposes.
Co-ops and Probate in Florida – In Detail
Under Florida law, a co-op must be treated as real property for probate purposes. If a Florida resident dies owning a co-op titled solely in his or her name, the property must go through probate.
Surprisingly, co-ops are partially subject to the homestead protection outlined in Florida’s Constitution. During probate, state laws govern co-ops in terms of exemption when it comes to forced sales, creditors’ claims, and some tax implications.
However, co-ops do not enjoy homestead protection when it comes to inheritance rights, which define specific conditions on devise and descent.
It is fundamental to remember that the real owner of the co-op is a corporate entity. When someone buys into a co-op, that person becomes a shareholder of a corporation. As part of the shareholders’ rights, the individual is entitled to exclusive use of that property for residential purposes.
Probate Does Not Need to be Overwhelming – Immediately Contact an Expert Florida Probate Attorney
An experienced legal advisor in Florida probate law, Attorney Romy B. Jurado willingly wants to assist you throughout this process. Contact us by calling (305) 921-0976 or emailing Romy@juradolawfirm.com to schedule a consultation.