The public offering statement shall disclose fully and accurately the characteristics of the condominium or conversion condominium development and the units therein and all unusual and material circumstances and features affecting the condominium or conversion condominium development. The public offering statement shall not intentionally omit any material fact or contain any untrue statement of a material fact and shall contain all of the following:
(a) A statement indicating the name, addresses and telephone numbers of:
(1) The developer and legal and beneficial owner, if different, of the land and improvements, including all general partners of a partnership, or all directors and owners of five percent (5%) or more of the beneficial interest in the stock of a corporation.
(2) The mortgages, the principal sales and management agents, attorneys, accountants, architects, engineers and contractors.
(3) The condominium development, which shall include the work condominium, and the development manager or his agent.
(b) A description of all condominium property and improvements in readable and understandable language, which shall include the following:
(1) A general narrative description stating the total number of units, a description of the types of units, the price of each type of unit, all appliances and personal property included with each unit, a general description of the building or buildings, stating the materials of which they are constructed and the number of stories and basements, the precise nature of ownership offered and the total number of units that may be included in the development by reason of future expansion or merger of the development.
(2) A description of all of the common areas and facilities and the share of ownership of each unit in the common areas and facilities. Limited common areas and facilities, if any, and their ownership shall also be indicated. This shall be done by indicating the basis upon which the share is allocated and the procedure of how same may be altered.
(3) A site plan showing location and dimensions of the condominium or conversion condominium development and the land it occupies, including the legal description, together with all capital improvements, a typical floor plan, and typical individual units plans, including dimensions, location, approximate area, number of rooms and the immediate common area or limited common area to which it has access.
(4) A description of each of the capital improvements contemplated but not yet completed by the developer, including the type and quality of materials to be used, the estimated cost and the dates by which such capital improvements shall be completed.
(5) A description of the nature and ownership of all improvements and sub-lots occupying the same zoning lot, but which are not part of the condominium or conversion condominium development and the locations, nature and ownership of easements, streets, roads, driveways and parking facilities which are associated with the condominium development.
(6) A statement as to the maximum number of units the developer intends to retain ownership of and/or to transfer to persons who do not intend to reside therein. In no event shall more than five percent (5%) of the units be retained or so transferred, unless in the case of a conversion condominium development same are leased to the tenants living therein prior to the conversion and further provided that this exemption shall be applicable only as long as the original tenant continues to reside therein and that the name, address and telephone number of the lessor is provided to the unit owners' association and to the Building Department.
(7) A statement disclosing whether any units or common areas or facilities in the condominium or conversion condominium development may be used for commercial purposes, the nature and extent of such uses, the effect of such uses, if any, on the condominium unit owners and the restrictions, if any, upon the use or uses thereof. In no event shall the percentage be more than ten percent (10$) or be permitted where prohibited by the Planning and Zoning Code.
(8) A description of the nature of any restraints on the free alienability and/or use of all or any part of the condominium or conversion condominium development, excluding residential zoning use. If there are any restrictions upon the free sale, transfer, conveyance, encumbrance, or leasing of a unit, the following statement shall be inserted in a type size and style equal to at least twenty point bold type:
"THE SALE, LEASE OR TRANSFER OF UNITS (NUMBERS) IS RESTRICTED OR CONTROLLED."
Immediately following this statement, there shall appear a reference to the documents, articles, paragraphs and pages where the restriction, limitation or control on the sale, lease or transfer of units is set forth or described in detail.
(9) Immediately following this statement, there shall appear a description of the restriction, limitation or control on the sale, lease or transfer of units in readable and understandable language.
(10) A report by the developer stating the age, condition and developer's opinion of the remaining useful life of structural elements and mechanical and supporting systems, together with the developer's estimate of repair and replacement cost projected for five years from the date of the filing of the declaration pursuant to this chapter. This shall be based upon inspection of relevant drawings, records and personal inspection of the elements and systems.
(11) A statement that each unit owner shall be a member of a unit owners association which shall be established for the administration of the condominium property.
(12) The name of a person to receive service of process for the unit owners association, together with the residence or place of business of the person, which residence or place of business shall be in Cuyahoga County.
(13) The method by which the declaration may be amended, which shall require the affirmative vote of those unit owners exercising not less than seventy-five percent (75$) of the voting power.
(14) A general disclosure of the status of construction, zoning, site plan or other approval, and compliance or notice of failure to comply with any other federal, State or local statutes or regulations affecting the development , and the actual or scheduled dates of completion of buildings, recreation facilities and other common areas and facilities.
(15) The significant terms of any financing offered by or through the developer to purchasers of the condominium ownership interests in the development, including the name of any bank or other institution involved in the financing, the minimum down payment, a statement that the prospective purchaser may obtain financing from another bank or institution and the annual interest rate.
(16) A description of warranties for structural elements and mechanical and other systems, stated separately for units and for common areas and facilities.
(17) A statement of the significant provisions for management of the condominium development which shall include the following:
A. Conditions for the formation of a unit owners association.
B. The apportionment of voting rights among the members of the association, including whether cumulative voting rights exist.
C. The contractual rights and responsibilities of the unit owners association.
D. A statement advising the purchaser that the condominium instruments are binding legal documents and describing how such instruments may be altered or amended by the unit owners association.
E. A facsimile of any management contract or other agreement affecting the operation, use or maintenance of or access to all or any part of the condominium or condominium conversion development, with a brief narrative statement of the effect of each agreement upon a purchaser, including a specification of the services to be rendered and the charges to be made thereunder, and a statement of the relationship, if any, between the developer and the managing agent.
F. A statement in twenty point bold face type of the purchaser's right to review the condominium instruments, to void the contract, any conditions for the return of deposit and a statement of the rights of purchasers under this chapter.
G. The requirement for the establishment of a reserve fund to finance the cost of repair or replacement of the components of the common areas and facilities.
H. The significant terms of any encumbrances, easements, liens and matters of title affecting the condominium or conversion condominium development.
I. A statement of the requirement for escrow of deposits.
J. A statement of any restraints on the free alienability of all or any part of the condominium or conversion condominium development.
K. A statement describing any present or imminent litigation concerning the condominium or conversion condominium development.
(c) In the case of an expandable condominium property, the declaration also shall contain all of the following:
(1) The explicit reservation of the declarant's option to expand the condominium property.
(2) A statement of any limitations on that option, including a statement as to whether the consent of any unit owners is required, and if so, a statement as to the method whereby the consent is to be ascertained, or a statement that there are no such limitations.
(3) A time limit, not exceeding five years from the date the declaration is filed with the City, renewable for an additional five year period at the option of the developer, exercisable within six months prior to the expiration of the five year period and with the consent of the majority of the unit owners other than the developer upon which the option to expand the condominium property shall expire, together with a statement of any circumstances that shall terminate the option prior to the expiration of the time limit.
(4) A legal description by metes and bounds of all additional property that, through exercise of the option, may be submitted to the provisions of this chapter, and that, thereby, may be added to the condominium property.
(5) A statement as to whether all, or a particular portion, of the additional property shall be added to the condominium property, or whether, if any additional property is added, all or a particular portion of the additional property shall be added, and, if not, a statement of any limitations as to the portions that may be added or a statement that there are no such limitations.
(6) A statement as to whether portions of the additional property may be added to the condominium property at different times, together with any limitations fixing the boundaries of those portions by legal descriptions setting forth the metes and bounds of those portions, or regulating the order in which they may be added to the condominium property, or both.
(7) A statement of any limitations as to the location of any improvements that may be made on any portion of the additional property added to the condominium property, or a statement that there are no such limitations.
(8) A statement of the maximum number of units that may be created on the additional property. If portions of the additional property may be added to the condominium property and the boundaries of those portions are fixed in accordance with subsection (c) (6) hereof, the declaration shall also state the maximum number of units that may be created on each portion added to the condominium property. If portions of the additional property may be added to the condominium property and the boundaries of these portions are not fixed in accordance with subsection (c)(6) hereof, the declaration shall also state the maximum number of units per acre that may be created on any portion added to the condominium property.
(9) Except in cases where the previously submitted condominium or conversion condominium property contains no units restricted exclusively to residential use, a statement of the maximum percentage of the aggregate land and floor area of all units not restricted exclusively to residential use that may be created on any additional property or portions of additional property that may be added to the condominium property. In no event shall the percentage be more than five percent (5%) or be permitted where prohibited Eby the Planning and Zoning Code.
(10) A statement that any structures erected on any portion of the additional property added to the condominium property shall be compatible with structures on the submitted property in terms of quality of construction, the principal materials to be used and architectural style.
(11) With respect to all improvements to any portion of additional property added to the condominium property, other than structures, a statement setting forth both of the following:
A. A description of the improvements that shall be made or a statement that no other improvements shall be made; and
B . Any restrictions or limitations upon the improvements that may be made or a statement that there are no restrictions or limitations upon improvements that may be made.
(12) With respect to all units created on any portion of additional property added to the condominium property, a statement setting forth both of the following:
A. Whether all such units shall be substantially identical to units on previously submitted land; and
B. Any limitations as to what types of units may be created on the additional property or a statement that there are no limitations.
(13) A description of the declarant's reserved right, if any, either to create limited areas and facilities within any portion of the additional property added to the condominium property or to designate common areas and facilities within each portion that may subsequently be assigned as limited common areas and facilities, in terms of the types, sizes and maximum number of such areas and facilities in each portion.
(14) Such drawings and plans as necessary in supplementing the requirements of subsections (c)(4), (5), (6), (7), (8), (10) and (11) hereof.
(d) In the case of leasehold condominium development, the declaration shall also contain all of the following:
(1) With respect to any ground lease or other leases, the expiration or termination of which shall or may terminate or reduce the amount of the condominium property, a statement setting forth the county in which the lease is recorded and the volume and page of the record.
(2) A statement setting forth the date upon which each lease referred to in subsection (d)(1) hereof is due to expire.
(3) A statement as to whether any land or improvements of the condominium property shall be owned by the unit owners association in fee simple, and if so, either a description of the land or improvements, including a legal description by metes and bounds of the land, or a statement of any rights the unit owners shall have to remove such improvements within a reasonable time after the expiration of termination of the ninety-nine year lease or leases involved, or a statement that they shall have no such rights.
(4) A statement of the rights the unit owners association have to redeem the reversion or any of the reversions, or a statement that they have no such rights.
(5) A statement that, subsequent to the filing of the declaration, no lessor who executed it, and no successor in interest to the lessor, has any right or power to terminate any part of the leasehold interest of any unit owner who makes timely payment of his share of the rent to the person designated in the declaration for the receipt of the rent and who otherwise complies with all covenants that, if violated, would entitle the lessor to terminate the lease.
(e) Estimated financial statements, including the following:
(1) A three year estimated operating budget, revised and updated at least every six months, of annual expenditures necessary to operate and maintain the common areas and facilities of the condominium or conversion condominium development, specifically stating the assumptions and bases on which each item included in such operating budget was formulated, and a complete statement of estimated monthly cost per unit for such three year period. The developer may be held financially responsible for any intentional misrepresentations in the estimated operating budget. The estimated operating budget shall, without exception, include at least the following costs expressed in a dollar amount:
A. Operating costs
Public health pest control
Utilities
Heating fuels
Janitorial services
Trash and garbage disposal
Ground and building maintenance
Security
Maintenance and operation of recreational and other facilities Building insurance
Elevator maintenance
Sidewalk and street maintenance
Parking lot maintenance
Other operating costs, fees and assessments.
B. Management costs
Accounting and bookkeeping services
Legal services
Management fees
Other management costs
C. Reserve costs
Reserve for unexpected repair work
Reserve for replacement and upkeep of common and limited common areas and facilities
Other reserve funds
If no reserve is provided for any one or more of the applicable reserve costs listed herein, the following statement shall be inserted in a type size and style equal to at least twenty point bold type: "THE DEVELOPER HAS NOT PROVIDED A RESERVE FOR CERTAIN POSSIBLE FUTURE COSTS OF THE CONDOMINIUM IN HIS BUDGET. ACCORDINGLY , IT SHALL BE NECESSARY TO PROVIDE FOR A SPECIAL ASSESSMENT TO ALL CONDOMINIUM UNIT OWNERS TO PAY FOR SUCH COSTS SHOULD THEY OCCUR."
(2) A three year statement revised and updated every six months and facility operating budget for every individual unit, and a statement of all additional estimated monthly expenses for the same period for each unit to be itemized as to utilities, parking, operating and maintenance expenses, recreational facilities and any other anticipated expenses, costs, fees and assessments for each unit. The statement shall include the formula or basis used in arriving at these amounts.
(3) A statement as to what financial arrangements the developer has made to cover the estimated common areas operating budget in the event an insufficient number of units are sold.
(4) A statement of the current realty taxes for each individual unit and estimated changes in the tax assessment for each individual unit, assuming the taxes as reappraised are based upon the sales price of the real estate.
(5) A statement that any deposit made in connection with the purchase or reservation of any unit shall be placed in an escrow account or held in trust until: (1) delivered to the developer; (2) delivered to the developer because of purchaser's default under a contract to purchase the unit; or (3) refunded to the purchaser. A deposit of two thousand dollars ($2,000) or more, if held for more than ninety days shall bear interest at the rate of not less than five percent (5%) per annum for any period exceeding ninety days, and the statement shall so specify. Such escrow funds shall not be subject to attachment by the creditors of either the purchaser or the developer, and the statement shall so specify.
(6) Any condominium or conversion condominium development which does not comply with the requirements of Section 1302.04(e) and (f) shall further indicate in a type size and style equal to at least twenty point bold type the formula or method by which a unit shall be assessed for water usage within the development. In all condominium or conversion condominium developments the manner of assessment shall be based upon the number of individual residing in each unit as compared to the number of individuals residing in all units within the development, unless otherwise provided for in the declaration.
(f) A description of warranties, including the following:
(1) A three year warranty by the developer covering the full cost of any labor and materials for any repair or replacement of the common areas and facilities including, but not limited to, the roof and structural components and mechanical, electrical, plumbing and common service elements and a two year warranty covering the full cost of labor and materials for any repair or replacement of structural, mechanical, electrical, plumbing and other elements pertaining to each unit, excluding costs necessitated by acts of God and except as provided in subsection (f) (4) hereof.
(2) The warranties specified herein shall commence on the date of the filing of the deed of the first condominium ownership interest in the condominium or condominium conversion development to a purchaser in good faith for value and shall carry over and be enforcible by any subsequent good faith purchaser within the times specified in subsection (f)(1) hereof.
(3) In the case of an expandable condominium or condominium conversion development, the warranties shall commence for property submitted by the original declaration on the date the deed is filed for record following the sale of the first condominium ownership interest in the property, and for any additional property submitted by amendment to the declaration, on the date the deed is filed for record following the sale of the first condominium ownership interest in the additional property; in either case to a purchaser in good faith for value.
(4) In no event shall a purchaser in good faith for value of a unit from a developer receive less than a one year warranty covering the full cost of labor and materials for any repair or replacement of structural, mechanical, electrical, plumbing and other elements pertaining to each unit, excluding costs necessitated by acts of God, regardless of the expiration of the period specified in subsection (f)(1) hereof.
(5) In the case of ranges, refrigerators, washing machines, clothes dryers, hot water heaters, air conditioners and other similar appliances installed and furnished as part of the unit by the developer, the valid assignment by the developer of the express and implied warranties of the manufacturer satisfies the developer's obligation under this subsection with respect to such appliances, and the developer's warranty under this subsection is limited to the installation of the appliance.
(6) All warranties owned by the developer that exceed time periods specified herein with respect to any part of the units or common areas and facilities shall be assigned to the purchaser.
(g) Copies of the sales documents and literature, including, but not limited to:
(1) The sale brochures and purchase contracts to be used by the developer; and
(2) The declaration and by-laws of the unit owners association.
(h) Descriptions of the following documents:
(1) Any leases of real or personal property in the condominium or conversion condominium development other than residential leases expiring later than two years after the filing of the public offering statement with the City.
(2) Any employment contract, insurance policy or other contract affecting the use, maintenance or access to all or part of the condominium or conversion condominium development expiring later than one year after the filing of the public offering statement with the City. The description shall include a brief narrative statement of the effect of each agreement upon the purchasers including the services to be rendered and the charges to be made thereunder and a statement of the relationship to the developer or managing agent. Neither the unit owners or unit owners association shall be subject to any such contract or policy for more than one year subsequent to the assumption of control as provided in Section 1302.10.
(3) The coverage and amount of any insurance policies applicable to the condominium or conversion condominium development.
(4) Any management agreement, including name of management agent, services to be performed, term, charges, circumstances, if any, under which the charges may be increased, conditions, if any, under which the agreement may be cancelled or terminated, and a statement stating the relationship between the developer and the management firm, if any. The term of such management agreement shall be, in no event, greater than two years after the filing of the public offering statement with the City, or the assumption of control by the unit owners association as provided in Section 1302.10, whichever is earlier.
(i) A statement as to recreational facilities, including a statement of whether, and under what circumstances, the unit owners are required to be members of, support or participate financially other than as part of their common expenses in recreational facilities, such as, but not limited to, health clubs, exercise rooms, tennis courts, swimming pools, party rooms and golf putting greens. If any recreational facility is not part of the common areas, charges for its use shall not exceed charges customarily made for similar facilities in the City or in surrounding communities, and the statement shall so specify. Additionally, of any recreational facility not part of the common areas, the following warning shall be inserted in a type size and style equal to at least twenty bold type:
"THE (HERE NAME FACILITIES) ARE NOT INCLUDED IN THE COMMON FACILITIES. THESE FACILITIES ARE AVAILABLE TO UNIT OWNERS FOR (HERE DESCRIBE MONTHLY CHARGE AND INVITATION FEE). UNIT OWNERS ARE/ARE NOT (AS APPLICABLE) REQUIRED TO PARTICIPATE FINANCIALLY."
(j) A statement as to parking facilities, including a description of the location, ownership and availability to the unit owners and the general public of parking associated with the condominium. If such parking facilities are not part of the common areas, or divided as individual parking spaces among and designated as being part of the units, the parking facilities shall be legally dedicated to the exclusive use of the condominium or conversion condominium development and charges for the use of the parking facilities shall not exceed charges customarily made for similar facilities in the City or surrounding communities, and the statement shall so specify. Further,• the following statement shall be inserted in a type size and equal to at least twenty point bold type:
"PARKING FACILITIES ASSOCIATED WITH THIS BUILDING ARE NOT OWNED INDIVIDUALLY OR IN COMMON BY THE UNIT OWNERS."
It is further provided, however, that every such unit shall be provided with at least four parking units for its exclusive use and no variance or exception may be granted from this requirement.
(k) A statement conspicuously displayed on the first page of each copy of the public offering statement in a type size and style equal to at least twenty bold type:
"WARNING: ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER AND ARE NOT BINDING ON THE DEVELOPER. REFER TO THIS PUBLIC OFFERING STATEMENT FOR CORRECT REPRESENTATIONS."
(l) The signature of the executive officer of the developer to a statement affirming under oath that the public offering statement is, and any supplements, modifications and amendments are, true, full, complete and correct as he truly believes.
(m) Amendment to Public Offering Statement. The developer shall amend the public offering statement from time to time when any material changes occur in any matter contained therein. Amendments shall be made as soon as practicable after such material change occurs or the developer has reason to know of such material change, and a public offering statement is not current unless all amendments are incorporated therein and filed with the Building Department.
(n) Promotional Use of Public Offering Statement. The public offering statement shall not be distributed or used for any promotional purposes before its filing with the City; and afterwards, with the exception of sales brochures contained therein, shall be used only in its entirety for promotional purposes .
(Ord . 5985-1981. Passed 6-8-81. )