HOA Documents in a Real Estate Transaction
Selling a home in a home owner’s association (HOA) in Virginia there are mandatory disclosures that a home owner must make regarding the HOA to their contracted buyer. Thankfully, most HOAs are well versed in what documents must be provided in a resale disclosure. Every HOA that I’ve had to work with on behalf of my sellers has had a prepackaged resale disclosure package with the most up to date budget, meeting minutes, insurance, covenants and bylaws. Of course, the most important part of the HOA resale package is something called a compliance inspection.
Though folks that live in an HOA controlled community will often hear of regularly scheduled property inspections throughout the community, they are usually not as thorough as a resale compliance inspection. The HOA is charged with making sure the property being inspected is in good standing with the HOA and there are no covenants violations. Such violations would transfer with the property and could be costly to the next owner.
Even in the Residential Sales Contract used in Northern Virginia, the title section of the contract states that sellers will comply with all notices of violation from many state and local authorities, to include HOAs. So when HOA violations are noted on the compliance inspection in the resale disclosure package, the seller is responsible for correcting them. Not correcting noted violations leaves the buyer with the right to void the contract at the settlement table as the violations can result in a cloud on the title. No seller should put themselves in that precarious position.
My advice to home owners who live in HOAs is simple:
- Apply for every exterior modification you have made in which the HOA must have a say and keep the approval letters.
- Maintain the exterior of your home by weeding flower beds, fixing wood rot, keeping up with faded shutter and front door paint, and make sure to wash away any mold, mildew or algae growth from your siding and roof.
- Make sure your mailbox is in good condition from numbers, to wood rot and paint.
Ordering HOA resale packages ahead of listing will also give the seller an idea of what they need to fix that may not be general maintenance. They can work on those matters prior to listing and get that much needed HOA violation abatement letter that clears a seller in the title paragraph of the contract.
Of course, hiring a listing agent familiar with how HOA violations, or non-delivery of a legitimate resale package, can affect your sale is imperative. If you are in the market to sell in Gainesville or Bristow, or the surrounding areas, get in touch with me and let’s figure out the best plan for you.