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Have your HOA Documents Ready For Buyers

If your property is part of an association of condominiums, cooperatives, planned communities or any type of residence that has a homeowner’s association, you will need to disclose the Homeowner's Association (HOA) documents to the buyer at some point during the contract period. However, associations work on their own time to prepare the documents, so, go ahead and get them ready for the buyer in advance of a contract if you can. 

There are other reasons it’s good to be prepared for the buyer. Your Berkshire Hathaway HomeServices network professional should be in possession of your HOA documents in order to properly market your listing.  Buyers will have many questions such as how late in the evening they can use the community pool, where guests can park, and whether they can put a barbeque pit on the patio or balcony, among other concerns. Getting buyers timely answers is important to sustain their interest in your home. 

Delays in preparing the documents can cause a termination or violation of the contract if the buyer is not given sufficient time to study the documents in advance of purchase. The buyer will need to be aware of any pending special assessments, if any, what maintenance they’re responsible for VS the HOA, as well as how much they’ll be paying for HOA dues.  

Be aware that the HOA disclosures or documents do not take the place of a seller's disclosure about the listed property.  You’ll still have to prepare a seller's disclosure concerning your home’s systems, appliances and general condition. If you own a condominium, your disclosures will be about the interior of your unit, while the HOA disclosures will be mainly about the common property, community rules, maintenance responsibility, parking, restrictions, etc.

So which documents does the buyer need to see? The buyer will need to see the HOA’s Declaration of Covenants, Conditions and Restrictions (CC&Rs) which legally binds all the owners to compliance. The documents should also include the annual budget with planned expenditures, as well as the most recent accounting, typically a quarterly report. It’s important for buyers to know if there are any special assessments they’ll have to pay for in the future. 

Buyers need to be told in advance of rules and restrictions that may affect their purchase.  Many associations set their own community traffic speed rules, parking rules, exterior paint and design rules, among others that are more controlled than other properties may have. Deal breakers for some buyers can include restrictions on how long children staying with grandparents in an Over-55 community, whether you can have a boat or RV in the driveway, or how many pets you can own, among others. 

But the real purpose of disclosing HOA documents is to use them as a positive selling tool. HOA rules are there to enhance and protect communities rather than to be unnecessarily restrictive.  A good and well organized HOA can help you sell your property and the documents will show the intention of the community to be a good one. And the buyer can see with their own eyes how well-maintained and beautiful your home and community are.