Selling a Florida Condo With a Pending Special Assessment: FAR/BAR Contract Rules, Disclosures & Lender Blocks

The #1 Question Facing Florida Condo Owners: "Should I Sell Before the Assessment Hits?"

Across Florida—from Miami-Dade, Broward, and Palm Beach to Naples, Sarasota, Tampa Bay, and Daytona Beach—thousands of condominium owners have watched their boards announce upcoming Phase 2 Milestone Inspection repairs and mandatory Structural Integrity Reserve Study (SIRS) budgets totaling $25,000 to $100,000+ per unit.

Naturally, many owners attempt to list their unit immediately before the board formally votes to levy the special assessment. However, post-Surfside statutory reforms (SB 4-D, SB 154, and HB 1021) combined with strict Fannie Mae and Freddie Mac condo project underwriting blacklists have fundamentally rewritten the rules of selling a Florida condominium. Trying to conceal a pending assessment or using the wrong checkbox on the FAR/BAR contract will collapse your sale at the closing table—or expose you to a post-closing fraud lawsuit.

1. Who Pays the Special Assessment at Closing? (FAR/BAR Condo Rider Paragraph 3)

In Florida residential real estate transactions, the allocation of special assessments between Seller and Buyer is governed primarily by Paragraph 3 of the FloridaRealtors/FloridaBar (FAR/BAR) Comprehensive Rider A (Condominium Rider), alongside Florida Statute § 718.116.

Paragraph 3(c) forces the Seller and Buyer to check one of two legally binding boxes regarding special assessments levied by the association prior to the Closing Date:

• Option (a) — Seller Pays in Full at Closing (The Market Standard): If Option (a) is checked (or left blank, as Option (a) is typically the default fallback in standard negotiations), the Seller must pay the entire remaining balance of any levied special assessment in full at closing—even if the condo board allowed owners to pay the assessment in monthly installments over 5 or 10 years.
• Option (b) — Installments Prorated (Buyer Assumes Future Payments): Seller pays installments due prior to closing, and Buyer assumes all installments coming due after closing. Crucial Warning: While Option (b) sounds attractive to sellers, conventional mortgage underwriters (Fannie Mae/Freddie Mac) frequently reject Option (b) or count the assessment installment against the buyer's Debt-to-Income (DTI) ratio, killing the buyer's loan approval days before closing.

2. Mandatory Statutory Disclosures & The Buyer's 7-Day Cancellation Right (F.S. § 718.503)

Even if your condo board has not yet formally voted to pass the special assessment, you cannot hide behind "it hasn't been levied yet." Under Florida Statute § 718.503(2) (as strengthened by HB 1021), a non-developer seller of a residential condominium unit must provide the prospective buyer with:

1. A copy of the association's most recent Milestone Inspection Summary (if the building is 3+ stories and required to inspect under F.S. § 553.899).
2. A copy of the association's most recent Structural Integrity Reserve Study (SIRS) or a statutory disclosure statement that the association has failed to complete a required SIRS or Milestone Inspection.
3. The Declaration, Bylaws, Year-End Financial Report, Governance Form, and Frequently Asked Questions & Answers (Q&A) sheet.

The Un-Waivable 7-Day Rescission Clock: Under current Florida law (updated by HB 1021 from 3 days to 7 days, excluding Saturdays, Sundays, and legal holidays), the buyer's statutory cancellation window does not begin to run until the buyer receives all required condo documents, including the SIRS and Milestone Inspection summary. If a seller waits until 4 days before closing to hand over the Milestone report showing $3 million in needed balcony repairs, the buyer can legally walk away from the deal and recover 100% of their earnest money deposit.

3. How Title Companies & Lenders Catch "Un-Levied" Assessments

Some sellers assume that if the board delays the official assessment vote until next month, neither the buyer nor the bank will find out. In reality, two mandatory documents expose every pending repair prior to closing:

• The Association Estoppel Certificate (F.S. § 718.116(8)): Ordered by the title company 2 to 3 weeks before closing, the statutory Estoppel Certificate requires the CAM (Community Association Manager) to state whether there are any open violations, capital contribution fees, or approved/pending special assessments.
• Fannie Mae Form 1076 (Condo Project Questionnaire - Building Safety Addendum): Since the Surfside collapse, every conventional mortgage lender requires the property manager to complete a strict structural addendum asking: "Has the building had a Milestone Inspection identifying deferred maintenance, unsafe conditions, or planned special assessments?" If the manager answers "Yes" and repairs are not yet completed, Fannie Mae and Freddie Mac classify the building as Non-Warrantable ("Unavailable")—immediately killing conventional 30-year mortgages.

4. Four Tactical Strategies to Close Your Sale Successfully

If you need to sell a Florida condominium that has an active or pending Milestone/SIRS special assessment, follow this proven transactional playbook:

1. Deliver the SIRS, Milestone Summary & 12 Months of Board Minutes on Day 1: Upload the complete condo document package to the MLS before accepting an offer, and have the buyer sign the receipt acknowledgement immediately upon contract execution. This starts and expires the 7-business-day statutory rescission clock in the first week of the deal—before you take your unit off the market for 45 days.
2. Price the Unit Transparently & Pay Off the Assessment at Closing: Rather than fighting to force a buyer to assume a $35,000 assessment under Option (b) (which shrinks your buyer pool by 80% and triggers lender denials), price the condo to reflect a completed repair and agree under Option (a) to have the title company wire the full assessment payoff out of your closing proceeds.
3. Use a Title Escrow Holdback for "Pending / Estimated" Assessments: If the engineer has estimated a $25,000 per-unit repair cost in the Phase 2 report, but the board has not yet passed the formal assessment vote, negotiate a written Closing Credit or Escrow Holdback Agreement where the Seller leaves 100% to 125% of the estimated share in escrow with the title attorney for up to 6 months.
4. Target Cash Buyers or Non-QM Portfolio Lenders if Your Building Is Non-Warrantable: If your building is currently under active concrete restoration (scaffolding up, shoring posts in the garage, or failed Phase 1 report), do not accept offers contingent on standard 5%–10% down conventional or FHA loans. Require either cash offers or pre-approval from a Florida Non-Warrantable Condo Portfolio Lender (typically requiring 20% to 30% down).

Need to compare the cost of holding your unit and paying the assessment monthly versus taking a price cut today? Run your numbers through our Special Assessment Amortization Calculator, or review your legal rights if you are already behind on payments in our Condo Board Foreclosure Defense Guide.

Frequently Asked Questions