Transfer and Purchaser Approval in a Florida Cooperative: Where the Board's Power Comes From and Where It Stops

Jason Hamilton Mikes, JD, MBA
Founder & Managing Shareholder

• Published September 25, 2026
• Reviewed by Jason Hamilton Mikes, JD, MBA, September 26, 2026
• Florida Statutes as of July 1, 2026
• Applies to: Cooperatives

In a Florida cooperative, the board's power to approve or reject a buyer comes from the cooperative documents, not from Chapter 719. The statute caps the fee you may charge for the approval and then falls silent. That silence makes the proprietary lease and bylaws the whole of your authority, and it makes two bodies of law outside Chapter 719 the whole of your limits: fair housing law, and the common law rule against unreasonable restraints on alienation.

Where the approval power comes from

A cooperative is a form of ownership in which legal title to all of the property is vested in the association, and each member holds two things: an ownership interest or share in the association, and a lease or other muniment of title or possession to a particular unit. Section 719.103(12) defines the form, § 719.103(14) defines the cooperative parcel as the shares plus the lease, and § 719.103(27) defines a unit owner as the person holding both. Both legs are required.

That structure is why a cooperative board is in a different position from a condominium board on a sale. The condominium board consents to a neighbor's conveyance of real estate the neighbor owns. The cooperative board is being asked to accept a new shareholder into the corporation and a new tenant under a lease to which the association itself is the landlord. Drafters have long treated that as justifying a wider approval power.

Wider, but sourced entirely in the documents. Chapter 719 contains no approval standard, no approval deadline, no deemed-approved default if the board sits on an application, and no requirement that a denial be explained. Before a board does anything on a transfer, someone has to read the actual language of the proprietary lease and occupancy agreement and the bylaws and answer four questions: what transfers require approval, who decides, on what standard, and by when.

The answers are often narrower than boards assume. Documents requiring approval of a sale frequently say nothing about a gift, a transfer into the owner's own revocable trust, the addition of a co-owner, or a transfer to a devisee. If the clause does not reach the transaction, the board has no approval power over it, and acting as though it does is an exposure of its own. Our guide to reading cooperative governing documents covers how these clauses are built.

The one piece the statute does regulate: the fee

Section 719.106(1)(i) is the only provision of Chapter 719 that speaks to transfer approval, and it speaks only to money. No charge may be made by the association in connection with the sale, mortgage, lease, sublease, or other transfer of a unit unless two conditions are both met: the association is required to approve the transfer, and a fee for that approval is provided for in the cooperative documents.

Where both conditions are met, the fee may be preset but may not exceed $100 per applicant. A husband and wife, or a parent and dependent child, are considered one applicant. And on a renewal of a lease or sublease with the same lessee or sublessee, no charge may be made at all.

The same paragraph allows the association, if the documents so provide, to require a security deposit on a lease or sublease of up to one month's rent, to protect against damage to the cooperative property. It is held in a Florida interest-bearing account, and refunded or claimed by written notice within 15 days after the tenant vacates.

Four errors show up repeatedly: charging a fee when the documents require approval but do not authorize a fee, charging spouses separately, charging on a renewal, and adding a second charge under another name such as a move-in fee or an administrative fee. The statute caps the charge made in connection with the transfer, not the charge that happens to be labeled an approval fee. Whether the cost of the background report itself can be passed through on top of the $100 is not answered by the statute, and should be confirmed with counsel before it is billed.

The application, and the clock

Because the statute sets no deadline, the deadline is whatever the documents say, and most documents start the period on receipt of a complete application. Define what complete means, in writing, before the next application arrives. The first act on every file is then a completeness check, and the applicant learns the same day what is missing.

1. The association's application form, signed by every proposed occupant of legal age.
2. The fully executed contract, or the proposed sublease with the term and rent stated.
3. Written authorization to obtain a consumer report, signed separately from the application.
4. Identification for each applicant, and the names and ages of all intended occupants.
5. Disclosure of pets and vehicles, and of any animal for which an accommodation will be requested.
6. The approval fee the documents authorize, plus the security deposit on a lease or sublease.

If your documents give no period at all, the board is left with a reasonable time, which is a standard nobody wants to litigate. Set the period by rule or by amendment so the association and the seller work from the same date. A cooperative that takes nine weeks to answer a clean application invites a claim whatever the eventual answer is.

What the association actually looks at, and what it may not look at, is a subject of its own. See our guide to screening cooperative applicants lawfully for the Fair Credit Reporting Act mechanics and the fair housing limits on criteria.

The interview

Most cooperative documents permit an interview, and used correctly it is genuinely useful. It is the moment to explain how the community works: the assessment schedule, the parking, the sublease restrictions, the fact that the buyer is taking a proprietary lease and not a deed. Used incorrectly, it is where associations lose cases. The interview is not a second screening conducted off the record. Everything that could become a reason for denial has to be traceable to the written criteria and has to appear in the file.

• A fixed set of questions, asked of every applicant in the same order.
• Two people present, with notes on the same standard form each time.
• No questions about race, color, national origin, religion, sex, disability, or whether children will live in the unit. The application already gives you the occupant count.
• Grant a reasonable accommodation to attend, such as a remote interview, and document that you did.
• The interviewers report to the board; they do not decide, unless the documents say they do.

An interview requirement also produces a denial ground that is entirely defensible: the applicant refused to attend. Say that plainly in the decision letter if it is what happened.

The right of first refusal, where the documents provide one

Chapter 719 creates no right of first refusal. It neither grants one nor regulates one. If your association has one, it exists because the cooperative documents grant it, and every term of it is contractual: who may exercise, on what trigger, within what period, at what price, and what happens when the period runs out.

1. Read the clause on the day the contract arrives, not on the day the period expires.
2. Identify the holder. Some documents give the right to the association, some to the members, some to the association only if the members decline.
3. Identify the trigger and the period, which usually runs from receipt of a bona fide contract and independently of the approval period.
4. Identify the price term. Matching the contract price is common; a fair market value term requires an appraisal and takes time you may not have.
5. Confirm the association can actually close, which normally means a membership vote, available funds or borrowing authority, lined up before the period expires.
6. Confirm what happens if the period lapses. In most documents the right is simply waived as to that contract.

A right of first refusal the association cannot fund is not a bargaining chip. It is a deadline the board will miss. But it matters for a second reason boards rarely appreciate: it is one of the mechanisms that can make an otherwise arbitrary approval power lawful.

Grounds you can use, and grounds you cannot

The pattern that produces liability is almost never a single outrageous criterion. It is an unwritten criterion applied unevenly, discovered later when two similar applications came out differently.

Our overview of enforcement and fair housing covers the same consistency problem on the enforcement side.

Aquarian Foundation and the restraint on alienation

In Aquarian Foundation, Inc. v. Sholom House, Inc., 448 So. 2d 1166 (Fla. 3d DCA 1984), the association's documents gave it an absolute right to withhold consent to a transfer, backed by a reverter: if an owner transferred without consent, title reverted to the association. The Third District held that arrangement an unreasonable restraint on alienation.

The reasoning is the part to remember. An absolute and arbitrary power to reject a purchaser becomes reasonable when the holder is accountable for using it, and the court identified the form that accountability takes: an obligation to purchase at then fair market value, or to procure a substitute purchaser at that value, within a reasonable time. The court put it directly: "where a restraint on alienation, no matter how absolute and encompassing, is conditioned upon the restrainer's obligation to purchase the property at the then fair market value, the restraint is valid." The reverter supplied no such accountability, because no rational buyer would close without approval, so it would never be triggered and the owner was left with no remedy.

One honest qualification. Aquarian arose under a declaration of condominium, not a proprietary lease, and we are not aware of a Florida appellate decision applying it to a cooperative by name. But the rule it applies is general property law rather than Chapter 718 law, and a cooperative approval clause restrains alienation in precisely the same way. A board should plan on a court applying it.

The practical consequence is narrow and useful. If your documents give the board an unconditional veto with no duty to buy and no duty to find a buyer, that veto is exposed, and the more arbitrary its exercise looks, the more exposed it is. A denial grounded in an articulated, uniformly applied standard is not a naked restraint on alienation at all, which is why writing the reason down is a defense rather than a confession.

Documenting the decision

1. Measure the application against the written criteria and record the result item by item.
2. Take the decision by board vote at a properly noticed board meeting, or by whatever method the documents authorize. Do not decide by a round of text messages.
3. Record the vote in the minutes, identifying the unit and the action, without the applicant's financial or personal information.
4. Issue a dated, signed written decision to the applicant and the selling member, stating the ground if the answer is no.
5. File the application, the reports, the interview notes and the decision together, and keep them.

Section 719.104(2)(c)2. keeps that file out of the records-request stream: information obtained in connection with the approval of the lease, sale, or other transfer of a unit is not accessible to members. Keep transfer material separate from the general official records so a routine request does not sweep it up.

Contact Hamilton Mikes

Hamilton Mikes reviews cooperative transfer clauses, drafts written approval criteria and decision letters, and advises boards in Lee, Collier and Charlotte Counties on applications that are heading toward a denial. Call 239-594-7227 or visit our Sales, Leases and Occupancy page.