Buying a Commercial Unit in a Condo Created Between April 1, 1992 and January 1, 1996? Read This Before You Close

If you are buying a commercial unit in a Florida mixed-use condominium created between April 1, 1992 and January 1, 1996, pause before you assume its assessment share follows its square footage. A smaller unit can carry a much larger share of the association’s expenses. That can feel like a mistake when the monthly assessment rises. Sometimes it is. But sometimes the percentage is exactly what the recorded declaration says, and the declaration, not square footage alone, controls.

The surprise at assessment time

Imagine buying a commercial condo unit because the numbers look attractive. The commercial unit is modest. The association fees seem manageable. You review the budget, close the transaction, and operate your business.

Years later, the building faces major repairs, insurance costs increase, or a special assessment is approved. You compare your bill with a larger commercial unit next door. Your commercial unit has less square footage, yet its share of the assessment is higher.

Your first thought is understandable: There must be an error.

There may be an accounting error, but there may not be a legal error. In Florida, the ownership percentage assigned to a commercial unit can determine that commercial unit’s share of common expenses. For certain older mixed-use condominiums, that percentage may not have been required to track square footage.

The statutory gap

Florida’s condominium statute requires a declaration to state each unit’s undivided share of the common elements and common surplus. For residential condominiums created after April 1, 1992, section 718.104(4)(f) requires the ownership share assigned to each residential unit to be based either on each residential unit’s total square footage in a uniform relationship to the other residential units or on an equal fractional basis. (See the last section for how to calculate ownership interests.)

Section 718.404(3) applies a comparable rule to mixed-use condominiums created after January 1, 1996: the ownership share assigned to each residential or commercial unit must be based on uniform square-footage relationships or equal fractions.

That leaves a narrow but important period for mixed-use condominiums created after April 1, 1992 and before January 1, 1996. Section 718.104 had already imposed a formula for residential units, but section 718.404(3) had not yet imposed that formula on mixed-use units as a group. In that window, a commercial unit’s percentage may be set by the recorded declaration rather than by the unit’s size, provided the condominium documents and the statute otherwise support the allocation and the ownership interests for all units add up to exactly 100%.

The date must be investigated carefully. A condominium is created by recording its declaration in the county’s public records under section 718.104(2). A later amendment, phase, or change in the condominium structure can make the analysis more complicated. The recorded documents, not a listing, tax record, or an owner’s estimate of commercial-unit square footage, are the starting point.

Sailboat Cay: the association asked DBPR to lower its own unit’s share

This is not merely a theoretical possibility. In a 1999 declaratory statement, the Sailboat Cay Condominium Association itself petitioned DBPR about the allocation assigned to one of its own commercial units. That is the ironic part: the condominium association was trying to determine whether it could reduce or redistribute the assessment burden attached to its own management unit.

Sailboat Cay was a mixed-use condominium created in 1994, squarely inside the date window discussed above. Its commercial unit CU-219 had an approximately 4.4% share of the common elements, even though the commercial-unit percentages were not calculated by square footage. The developer had transferred CU-219 to the Association, which used it for management and meetings. Because the Association owned the unit, no individual commercial owner was paying that unit’s unusually large share.

The Association asked whether it could redistribute the 4.4% share, either among the commercial units or throughout the condominium. DBPR’s answer is the part prospective buyers should remember: the Association had to use the percentage interests stated in the recorded declaration when calculating common expenses. The fact that the commercial allocation looked disproportionate did not authorize the board to substitute a square-footage formula after the fact.

DBPR also rejected the idea that the allocation could be treated as a simple scrivener’s error. The total interests added up to 100%, and the record indicated that the commercial percentages had been intentionally assigned. Under the declaration and the framework considered in that proceeding, changing the percentage required the required owner and lienholder consents, including the stated approval of all unit owners. The board could not accomplish the redistribution by administrative action alone.

Finally, DBPR explained that an inequitable but intentional allocation is not corrected through the ordinary administrative error procedure. The remedy identified was reformation in equity, meaning a court remedy, not a routine DBPR or board-level adjustment. Read the DBPR Sailboat Cay declaratory statement before assuming that a commercial unit’s disproportionate percentage is an obvious drafting error.

Why the percentage matters

The practical rule is simple: the percentage is the commercial unit’s slice of the association pie.

Section 718.115(2) says that common expenses are collected from units in the proportions or percentages provided in the declaration. Applied to the issue here, that means a commercial unit’s share is generally determined by the percentage assigned to that commercial unit. The statute also says that, in a residential condominium or a mixed-use condominium created after January 1, 1996, the unit’s share of common expenses and common surplus is the same as its appurtenant ownership interest in the common elements.

So if a declaration assigns one commercial unit a 12% interest and another commercial unit a 6% interest, a $100,000 common expense would generally be allocated at $12,000 and $6,000 respectively, subject to the declaration, the nature of the expense, and any applicable statutory rule. Those are individual examples, not a complete condominium allocation. The remaining units must carry the remaining 82% so that all ownership interests together equal exactly 100%. The 12% commercial unit does not become 6% merely because it has fewer square feet than its commercial neighbor.

This does not mean every charge in every condominium is automatically calculated the same way. Declarations can address the allocation of particular expenses, and the statute contains specific rules for some categories. The point is that an owner should identify the governing allocation before assuming the bill is wrong.

Why fixing it may be difficult

Once a condominium has been created and units have been sold, changing the percentage is not like correcting a typo on an invoice. It can change every owner’s financial responsibility and ownership of the common surplus.

Section 718.110(4)(a) generally provides that an amendment changing the proportion or percentage by which a unit owner shares common expenses and owns the common surplus requires the affected unit owner and lienholders to join in the amendment, and requires approval by the record owners of all other units in the same condominium, unless the declaration originally provides otherwise. Section 718.110(4)(a) also addresses minimum voting requirements for declarations recorded after April 1, 1992.

That is why a commercial unit owner may face a practical obstacle. Reducing that commercial unit’s percentage usually means reallocating the difference to other residential or commercial units. Other owners may reasonably understand that their own percentages, and their future assessments, could increase. A proposed correction can therefore become a negotiation, not a routine administrative fix.

There is an important distinction between a genuine scrivener’s error and a deliberate allocation that an owner later considers unfair. Section 718.110(5) provides a streamlined correction process for certain errors where the total shares do not equal 100% or more than 100% has been distributed. But that provision is not a general method for rewriting a valid allocation that materially changes owners’ property rights.

What to check before buying

A buyer of a commercial condominium should treat the ownership percentage as a core financial term of the purchase, not as boilerplate.

1. Find the original declaration. Confirm the recording date, identify the condominium as residential or mixed-use, and locate the percentage or fraction assigned to the commercial unit.
2. Read every relevant amendment. Look for amendments changing unit boundaries, percentages, common expenses, phases, or the identity of the association.
3. Compare the percentages with the budget. Ask how regular assessments, reserves, insurance, maintenance, and proposed special assessments are allocated. Do not assume a quoted monthly fee will remain representative after a major project.
4. Check the neighboring commercial units. A comparison of commercial-unit square footage and ownership percentages can reveal an allocation that deserves legal review before closing.
5. Obtain the association’s records and disclosures. Review budgets, financial statements, pending assessments, meeting minutes, and any discussion of repairs or insurance. For a Miami-Dade property, the County’s Community Associations Registry is an additional place to start; the County explains that registered associations provide governing documents and other association information through the registry.
6. Have the declaration reviewed. A real-estate attorney can compare the recorded allocation with the condominium’s creation date, unit type, amendments, and the proposed expense allocation. That review is usually far less expensive than discovering the issue after closing.

The takeaway

The cautionary lesson is not that every older commercial condominium has an improper allocation. It is that square footage and financial responsibility can diverge, especially in a mixed-use condominium created during the period before section 718.404(3) applied. The Sailboat Cay declaratory statement demonstrates that this can leave a commercial unit carrying a percentage that looks surprising but remains the operative percentage in the declaration.

If you own such a commercial unit and its percentage seems high, do not simply stop paying an assessment. First compare the bill with the declaration, amendments, budget, and the statute in effect for that condominium. A dispute may involve an accounting mistake, an expense that should be allocated differently, a valid but unfavorable declaration, or a correctable recording error. Those are different problems with different remedies.

If you are considering buying a commercial unit, ask the question before signing: What percentage of the condominium’s common expenses will this commercial unit carry, and where does that percentage appear in the recorded documents? The answer may matter more than the commercial unit’s square footage.

Extra: How ownership interests are calculated after January 1, 1996

The statute describes two basic methods for assigning ownership shares in the condominiums to which these formulas apply: a uniform relationship based on square footage, or an equal fractional basis. Section 718.404(3) applies those alternatives to mixed-use condominiums created after January 1, 1996. The formula applies across the mixed-use condominium, so residential and commercial units are included in the same calculation. Section 718.115(2) then ties common-expense assessments to the proportions or percentages in the declaration, and for those newer mixed-use condominiums, to the unit’s ownership interest.

Here is the square-footage method using one residential unit, three commercial units, and a $60,000 common expense. The total area is 6,000 square feet. The 1,000-square-foot residential unit and the 1,000-square-foot commercial unit each represent one-sixth of the total. Each 2,000-square-foot commercial unit represents one-third.

Here is the equal-fraction method. The same mixed-use condominium could instead give each of its four units, including the residential unit and all three commercial units, one-fourth of the ownership interest. In that example, the different unit sizes do not change the equal shares, and each unit would be responsible for one-fourth of the $60,000 common expense.

These examples explain the ordinary formulas. They do not replace the recorded declaration, and they do not mean that every older commercial condominium can be recalculated using one of them. That is precisely why the condominium’s creation date and the commercial-unit allocation in the recorded declaration matter.

This article is general information about Florida law, not legal advice, and does not create an attorney-client relationship. Condominium rights and assessments depend on the recorded declaration, amendments, bylaws, budget, expense, and facts specific to the property. Statutes can change; confirm the law and documents with a Florida condominium attorney before relying on this article.

Authorities cited: Fla. Stat. § 718.104(2), (4)(f)-(g); Fla. Stat. § 718.404(3); Fla. Stat. § 718.110(4)-(5); Fla. Stat. § 718.115(2)-(3); and In re Sailboat Cay Condominium Association, Inc., DBPR Case No. DS 98-040, File No. DS98162, Final Order No. BPR-99-00063 (Jan. 6, 1999).