What is a condominium and how is a condominium created?
In Rhode Island, a condominium is any real estate project which includes individually owned units (i.e. a residential condominium unit) and common elements (i.e. general common elements and limited common elements) that are owned by the unit owners as tentants in common.
A condominium is created in Rhode Island by recording a declaration of condominium with the appropriate office in the city or town where the condominium is located. The declaration of condominium must be drafted in accordance with the Rhode Island Condominium Act for all condominiums created after July 1, 1982. An attorney who is experienced with condominium law should always be retained when creating a condominium.
What are condominium bylaws?
Condominium bylaws are the rules of the condominium association. The bylaws are enforced by the condominium association’s elected officials. The bylaws can be changed with a certain percent vote of the condominium association. A buyer of a condominium should always review the condominium bylaws carefully prior to entering into a purchase and sales agreement. Buyers of condominiums are sometimes surprised to find out that according to some bylaws, representatives of the condominium association are allowed to enter the buyer’s condominium unit; pets are not allowed; or a buyer is not allowed to alter the exterior of their unit without the permission of the condominium associations.
What is a condominium unit? What is a general common element of a condominium? What is a limited common element of a condominium?
A condominium unit (i.e. residential living space) is the area that a unit owner has exclusive ownership interests in.
A general common element is owned by all of the unit owners as tenants in common with each other and all unit owners have the right to use and enjoy a general common elemnet (i.e. a road).
A limited common element of a condominium is owned by all unit owners as tenants in common with each other. However, only one unit owner or a limited, specified group of unit owners have the right to use and enjoy a limited common element (i.e. a patio, driveway, or porch).
What is a condominium purchase and sales agreement?
A condominium purchase and sales agreement is a contract to buy and sell a condominium unit. Many residential sellers of condominiums will use a standard condominium purchase and sales agreement form. However, there are many different purchase and slaes contracts available when buying or selling a condominium. It is always advisable to have an attorney who is experienced with condominium law to review or draft a condominium purchase and sales agreement prior to signing any such agreement.
What is a public offering statement?
A public offering statement is a summary of the declaration of condominium and includes important information relating to the condominium. A public offering statement must be drafted in accordance with the Rhode Island Condominium Act for all condominiums crated after July 1, 1982. A buyer has the right to concel the purchase and slaes agreement within 10 days after the receipt of the public offering statement. A seller of a condominium who is required to deliver a public offering statement to the buyer will face penalties prescribed by the Rhode Island Condominium Act if the seller fails to provide a public offering statement.
Is a public offering statement required prior to the closing of all condominiums?
A public offering statement is required by any declarant or person who is in the business of selling real estate when that declarant or person offers a condominium unit for sale on his own account to a puchaser of a condominium unit.
A public offering statement is not required in the following instances: i. if the condominium contains 12 units or less, is not subject to further development rights, and the declarant of the condominium has owned the units for more than 2 years from the date of the first sale; and ii. nonresidential condominium projects where all of the units are nonresidential or in residential projects where waived by agreement; and in the following instances: disposition or transfer by gift; court order; by a government agency; foreclosure or in lieu of foreclosure; disposition or transfer to a person in the business of real estate who intends to resell the unit; and when the purchase and sales agreement may be cancelled without penalty by the buyer.
What is a condominium resale certificate? When is a condominium resale certificate required prior to the closing of a condominium?
A condominium resale certificate is required for all sales when a public offering statement is not required. However, a condominium resale certificate is not required if a public offering statement is exempt as explained in the previous question.
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