There are nearly 800 co-operative projects in the state of Florida, some of them dating back to the 1950’s. Prior to the condominium revolution of the 1970’s and 1980’s, co-operatives, or “co-ops,” were a way for many individual people to divvy up ownership of one building or land parcel. In a co-op, owners are shareholders of a corporation, the corporation owns the apartment building or land and “leases” the apartments or land back to the members, typically for a term of 99-years. As condominiums became more popular, co-ops became disfavored. However, in certain scenarios, the co-operative form of ownership may provide flexibility to owners that condominiums just can’t. For example, a coop can also be a mobile home park, a recreational vehicle park, or a campground? For vacationers to the Daytona Beach area, owning a co-operative campsite might be ideal to park the RV for Bike Week and then rent it out the rest of the year.
But with this flexibility comes additional regulation and some drawbacks. Mobile home parks and RV parks are subject to stringent health and sanitation requirements monitored and enforced by the Florida Department of Health. The RV park may need to pay bed or resort taxes to the local taxing authority if spaces are rented to the public. And there is caselaw that co-operative property may not be afforded the same homestead protection as a condo or single-family home when its owner dies.
It is important you understand the potential benefits and liabilities of owning a co-operative before purchasing. Similarly, owners who serve on the Board of Directors of a co-operative should understand the unique nature of this property type and the regulations particular to the individual co-operative property. An experienced community association attorney can help navigate these uncertain waters.