The public offering statement shall disclose fully and accurately the characteristics of the conversion condominium development and the units therein and all unusual and material circumstances and features affecting the 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 mortgagees, the principal sales and management agents, attorneys, accountants, architects, engineers and contractors; and
(3) The conversion condominium development which shall include the word 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. This shall be done by indicating the basis upon which the share is allocated and the procedure of how same may be altered. Limited common areas and facilities, if any, shall also be indicated;
(3) A site plan showing location and dimension of the conversion condominium development and the land it occupies, including the legal description, together with all capital improvements, a typical floor plan, and typical individual unit plans, including dimensions, location, approximate area, number of rooms and the immediate common area and facility to which it has access;
(4) A description of each of the capital improvements to common areas and/or individual units 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 conversion condominium development and the locations, nature and ownership of easements, streets, roads, driveways and parking facilities which are associated with the conversion condominium development;
(6) A statement as to the maximum number of units a developer intends to retain ownership of and/or to transfer to persons who do not intend to reside therein;
(7) A statement disclosing whether any units or common areas and facilities in the 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 commercial uses be permitted where prohibited by the Planning and Zoning Code as indicated in Chapter 1121 of the Codified Ordinances;
(8) A description of the nature of any restraints on the free alienability and/or use of all or any part of the 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 description of the restriction, limitation or control on the sale, lease or transfer of units in readable and understandable language. There shall also be 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;
(9) A report by the developer stating the age, the condition and the 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 costs projected for five years from the date of the filing of the public offering statement pursuant to this chapter. This shall be based upon inspection of relevant drawings, reports, records and personal inspection of the elements and systems; any limits on the inspection shall be stated in the report;
(10) 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 building, recreation facilities and other common areas and facilities. Such disclosure shall indicate what need not be built and what shall be built;
(11) A statement describing any present, imminent or threatened litigation concerning the conversion condominium development; and
(12) The significant terms of any encumbrances, easements, liens and matters of title affecting the conversion condominium development. Unless otherwise expressly agreed to in writing by the purchaser(s), a unit shall be conveyed free and clear of all encumbrances, easements, liens and matters of title against a unit.
(c) A statement of the significant provisions for management of the conversion condominium development which shall include the following:
(1) A general disclosure of the rights and obligations of the developer;
(2) A statement that each unit owner shall be a member of the unit owners association;
(3) Conditions for the formation of the unit owners association, the time at which control of the condominium development shall be assumed by the unit owners association and whether the records of account shall be audited prior to delivery of same by the developer;
(4) The contractual rights and responsibilities of the unit owners association, including its obligations under Title 3 of the Building Code, the Exterior Property Maintenance Code;
(5) The quorum requirements for meetings of the unit owners association which shall not exceed twenty-five percent (25%) of the interest in the common areas and facilities;
(6) The standards for the maintenance and repair of individually owned units and areas and the method of enforcement thereof; and
(7) The name of the person to receive service of process for the unit owners association together with the residence or place of business of such person, which residence or place of business shall be in Cuyahoga County.
(d) A statement advising the purchaser in a type size and style equal to at least twenty point bold type that the condominium instruments are binding legal documents; how such instruments may be amended or altered either by the developer or by the unit owners association; the right of the purchaser to review the condominium instruments, to void the contract and a statement of the rights of purchasers, including the return of deposits, under this chapter.
(e) 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.
(f) Estimated financial statements, including the following:
(1) A two 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 conversion condominium development, specifically stating the assumptions and basis on which each item included in such operating budget was formulated, and a complete statement of estimated monthly cost per unit for such two 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 the following costs expressed in a dollar amount.
A. Operating costs.
Public health pest control
Utilities
Heating fuel
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 AND ALL CONDOMINIUM UNIT OWNERS TO PAY FOR SUCH COSTS SHOULD THEY OCCUR."
(2) A two year statement of the estimated common area and facility operating budget, revised and updated every six months, for each 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 and be expressed in a dollar amount;
(3) A statement as to what financial arrangements the developer has made to cover the estimated common area 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 at closing; (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 four percent (4%) 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; and
(6) A statement 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 conversion condominium developments the manner of assessment shall be based upon the number of individuals residing in each unit as compared to the number of individuals residing in all units within the development unless otherwise provided for in the public offering statement.
(g) A description of warranties, including the following:
(1) A two 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 (g)(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 conversion condominium development to a purchaser in good faith for value and shall carry over and be enforceable by any subsequent good faith for value purchaser within the times specified in subsection (g)(1) hereof;
(3) 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 (g)(1) hereof;
(4) 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 division with respect to such appliances and the developer's warranty is limited to the installation of the appliances; and
(5) All warranties owned by the developer that exceed time period specified herein with respect to any part of the units or common areas and facilities shall be assigned to the purchaser.
(h) Copies of the sales documents and literature, including, but not limited to:
(1) The sales brochures and purchase contracts to be used by the developer; and
(2) The declaration and by-laws of the unit owners association.
(i) Description of the following documents:
(1) Any leases of real or personal property in the 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 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 purchaser 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 unless renewed by a vote of the unit owners association;
(3) The coverage and amount of any insurance policies applicable to the conversion condominium development maintained by or on behalf of the developer; and
(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 one year after the filing of the public offering statement with the City, or the assumption of control by the unit owners association, whichever is earlier, unless renewed by a vote of the unit owners association.
(j) A statement as to recreational facilities, including a statement of whether, and under what circumstances, the unit owners are required to be member 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 and facilities, 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 and facilities, the following warning shall be inserted in a type style equal to at least twenty point bold type:
"THE (here name facilities) ARE NOT INCLUDED IN THE COMMON AREAS AND 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."
(k) A statement as to parking facilities, including a description of the location, ownership and availability to unit owners and the general public of parking associated with the condominium. If such parking facilities are not a part of the common areas and facilities 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 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 two parking units for its exclusive use and no variance or exception shall be granted from this requirement.
(l) A statement conspicuously displayed on the first page of each copy of the public offering statement in a-type size and equal to at least twenty point 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 REPRESENTATION. THE CITY OF FAIRVIEW PARK ASSUMES NO LIABILITY FOR THE DEVELOPMENT OR THE DEVELOPER'S ACTIONS OR FAILURES TO ACT (HOWEVER THE CITY WILL USE THE POWERS GRANTED BY THIS CHAPTER IN AN EFFORT TO ASSURE COMPLIANCE WITH ITS PROVISIONS.)
(m) The signature of the executive officer of the developer to a statement affirming under oath that the public offering statement is and any supplement, modifications and amendments are true, full, complete and correct as he truly believes.
(n) Amendments. 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.
(o) Promotional Use. 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. 80-84. Passed 1-19-81.)