Are you or anyone in your condominium renting a unit more than 3 times a month? Did you know if you do you must have a license pursuant to Florida law? If not, you are not alone. There are several condominium owners who have jumped into the rental market as a way to lessen the burden of a short term investment turned long term investment due to the collapse of the real estate market.
A resort condominium is defined by the Division of Hotels and Restaurants as, “Any unit or group of units in a condominium, cooperative or time share plan which is rented three times in a calendar year for periods of less than 30 days or one calendar month, whichever is less, or which is advertised or held out to the public as a place regularly rented for periods of less than 30 days or one calendar month, whichever is less.” (Section 509.242(1) (c), Florida Statutes) Something as arbitrary as remembering that February does not have 30 days can be the difference between a property that runs smoothly and the necessity to obtain a Resort Condominium license.
The licensing process is very simple. There is an application that must be submitted for review by the division along with a cost for application that may differ depending on the application. After completing the application, it is imperative that the owner obtain a Federal Employer Identification Number and a Sales Tax Registration Number or an exemption. Resort condominium licenses are divided into three specific groups.
1. Single License- may include one or multiple units within a building or group of buildings owned and operated by an individual person or entity, but not a real estate agent, appraiser, etc.
2. Group License- issued to a licensed agent to cover all rooms or units within a building or group of buildings in a single complex.
3. Collective license- issued to a licensed agent who represents a collective group of units found on separate locations. A collective license is limited to 75 units or less and is restricted to counties within one district.
It is important to note that the term “Licensed Agent” does not infer that the operator of a management company must obtain a license from the Division of Real Estate. As per the Division of Hotels and Restaurants, a “Licensed Agent” means that the operator of a management company has been “licensed” by the property/unit owner to hold out the property/unit for rent on a transient basis. The “license” can be in the form of a rental agreement or contract between the two parties.
There are a very stringent set of rules that are put forth by the division and periodic inspections to enforce those rules. They range from something as obvious and necessary as displaying all licenses in a conspicuous manner to making sure that if the complex uses liquid soap it is in dispensers. If a condominium is 3 stories or more, the owner must file a Certificate of Balcony inspection form every 3 years unless the stairs are “common elements”, defined as: parts of a condominium, cooperative, or private home association shared by all residents, so that each unit owner holds an undivided interest in. A full list of rules and details can be found on the division’s website. It is vital to pay close attention to the fine print of the specifications to avoid penalty. As a registered resort condominium owner, one can expect one or two safety inspections per year. Even routine inspections are unannounced and may take place at any time during normal business hours. Violations are subject to penalty by not only the division but the Fire Chief as well. Inspections can also be conducted in lieu of a complaint and may be partial, meaning an inspection of only the area of complaint. It can also be a full inspection, which is purely discretionary.