Homeowner Associations can be a great asset to any residential property, but there are also specific details, as a homeowner and potential home seller, you should be familiar with.
Before selling your home, it’s best to do your due diligence. This may include asking your HOA president or management company how many renters are in the complex and inquiring if one owner owns more than one unit.
Knowing more about your HOA will help ensure that when you do put your home on the market, there are no issues when you have a potential buyer.
Once you are in a position to sell your home, here’s some information related to HOAs to be familiar with:
- Section 7 D(4) of the California Residential Purchase Agreement and Joint Escrow Instructions (RPA-CA Revised 12/15) states that a Seller shall pay HOA fees for preparing documents required to be delivered by Civil Code §4525.
- HOAs that are operated by a third party management company will provide these documents on the seller’s behalf, for a fee to be paid up-front by the seller before the documents will be provided to escrow.
- In addition, if Section 7 D(5) of the RPA is marked for documents other than those that are required per Section 7 D(4), the additional documents will need to be ordered and in most instances will incur additional up-front fees.
Before moving into escrow, be aware that often there is an up-front fee, charged by the HOA management company.
- This fee must be paid prior to escrow receiving the HOA documents for delivery to the buyer.
- This fee varies based on the individual HOA, but there is often an option for the seller to pay the fees online.
- Each company operates differently, so ensure you know your specific HOA’s requirements.
There are also some time constraints related to this topic.
- Under the Residential Purchase Agreement, unless otherwise stated, the seller will have three days after acceptance to request and pay for HOA documents.
- The seller then has seven days from acceptance of the Residential Purchase Agreement to provide the documents to the buyer.
- Often, there is a rush fee required by the HOA Management Company to provide the documents within the required time frames. Please note that these are not escrow charges. These fees are paid to the HOA or Management Company to provide the contractually required HOA documents to escrow.
We hope this article helped clarify some information around HOAs and selling your home. Of course, if we can be of assistance to you, please contact us! We’re here to help you.