What are the conditions that "legally" allow the board to disapprove a home buyer or potential tenant - do the state statutes define this or is it at the interpretation of the association documents?
I'm going to offer some information here from a recent response to a similar question:
Other than setting a maximum fee of $100, Florida statutes offer little guidance on the issue of buyer and tenant approvals by boards of directors. As a result, the Declaration of Condominium and By-Laws provide primary instructions and authority for such actions. Much disparity exists among the thousands of condominium communities. Some declarations prohibit screenings and approvals. Others, especially older condos, offer a right of first refusal by which the board can actually purchase a unit if the approval process exposes a less than desirable buyer. Still other associations conduct extensive background investigations and occasionally, turn down potential buyers and tenants.
With so many variations in play, every board seems to have its own idea of what is appropriate. Some will tell you that a board can only reject a buyer by exercising the first refusal right. Others believe the board can reject any potential buyer without cause. (Of course, if the disgruntled buyer files a discrimination suit against such a board, some very good reasons need to be in the file.)
In a condo community with approval rights, the procedure usually works like this:
a. An application is completed and a fee is paid. The buyer/tenant signs a waiver/release to permit background and credit checks.
b. The approval committee or manager proceeds with the investigation (often outsourced) and reports the findings to the board.
c. Many boards or their appointed committees insist on a personal interview.
d. The board approves/disapproves the application.
e. For approved applications a Certificate of Approval is prepared and forwarded to the closing agent, a copy of which is included with the deed when it is filed in the county records.
Not every community is so thorough (or is permitted to be by their Declaration) and rejections are rare. But they do occur. One of my associates signed a contract for a condo unit on South Beach several months ago. She was acquainted with one of the board members and had some prior disagreements. Her application was rejected without a stated cause. Because she was not in class protected by the fair housing statutes, she was unable to find a practical way to overturn the decision.
I know this process seems alien to owners of single family dwellings. However, condominium and cooperative communities are unique. The idea that a criminal may be living down the street has less impact than living across the hall, sharing an elevator, and a garage. The Florida Supreme Court, in a preface to a ruling, had this to say:
"Inherent in the condominium concept is the principle that to promote the health, happiness, and peace of mind of the majority of the unit owners since they are living in such close proximity and using facilities in common, each unit owner must give up a certain degree of freedom of choice which he might otherwise enjoy in separate, privately owned property.
"Our Legislature also has expressly recognized the necessity for restrictions upon the use, occupancy and transfer of condominium units."