## Facts

- A developer created a non-phased condominium project in Manatee County, Florida, consisting of twenty buildings and eighty units.
- During the initial sales period, the developer elected to operate under the “developer guarantee” method in § 718.116(9)(a)2, Florida Statutes (1995), which caps purchasers’ assessments and requires the developer to pay any shortfall in common expenses not covered by guaranteed-level assessments collected from other owners.
- When control of the condominium association was turned over to unit owners, some units contemplated by the condominium documents had not yet been constructed.
- A dispute arose over whether the developer had to fund reserve accounts for deferred maintenance and replacement attributable to the unbuilt units.
- The developer acknowledged responsibility for operating deficits and reserve funding related to the constructed condominium property during the guarantee period, but denied any duty to reserve for property not yet in existence.
- The developer sued for declaratory relief; both parties moved for summary judgment.
- The trial court granted summary judgment for the association, concluding the developer had to fund reserves for the unbuilt units; the developer appealed.

## Issues

1. Whether § 718.116(9)(a)2, Florida Statutes (1995), requires a developer using the statutory assessment guarantee to fund reserve accounts for condominium units not yet constructed at the time of turnover in a non-phased condominium.

## Decision

- The appellate court reversed the summary judgment for the association.
- The court held the developer was not required to fund maintenance reserves attributable to unbuilt units at turnover.
- The case was remanded for further proceedings consistent with that interpretation.

## Legal Principles

- Under § 718.116(9)(a)2, a developer using a statutory assessment guarantee must pay amounts of “common expenses incurred” during the guarantee period that are not produced by guaranteed-level assessments received from other unit owners.
- Reserve accounts may constitute common expenses, but the developer’s guarantee obligation is tied to expenses actually incurred in operating the condominium property as it exists during the guarantee period.
- In a non-phased condominium, the statutory guarantee does not extend to prefunding reserves based on hypothetical future expenses for units or structures not yet constructed at the time association control is transferred.

## Conclusion

The court ruled that the developer-guarantee statute requires a developer to cover operating shortfalls and required reserves for existing condominium property during the guarantee period, but it does not require reserve funding for units that have not been built when control is turned over to the association.


Tara Manatee, Inc. v. Fairway Gardens at Tara Condo. Ass’n, Inc., 870 So. 2d 32 (Fla. 2d DCA 2003)