The amount of paperwork required during the home sale process is staggering. When you’re buried under a mountain of 180 pages related to the deal, it’s easy to neglect a stack that seems to hide on the periphery of the transaction: the Homeowners Association (HOA) documents. But your failure to be transparent and forthcoming with the rules, regulations, and financial state of the HOA governing the block could hold up the process or come back to bite you. So we chatted with an HOA lawyer with more than 15 years of experience and an agent who’s negotiated more than 600 real estate deals to walk you through what you’re required to disclose about your HOA, how to handle outstanding fees at closing and why you should have your HOA documentation professionally sourced and prepared. Buying a home in a neighborhood with an HOA comes with a variety of benefits, and a few drawbacks that your buyers should know about. They need to be prepared to pay the monthly HOA dues and any pending assessments, and they’ll want to know what those dues cover. For example, HOA dues at a condominium complex might include some form of homeowners insurance, but this isn’t typically true for a single-family home in an HOA neighborhood. The new owners also need to know about the restrictions on what they can do to their new home (like the type of holiday decor they can display in the yard or what color they can paint their house exterior) and which types of violations will result in fines. These details are all included in the HOA disclosure documents, along with the HOA’s financial reports. “The HOA disclosure is a two-inch thick packet that contains all the association rules, any amendments they’ve made, and the financial documents,” says Roxanne McCaslin-Curtis, a top-selling real estate agent in Sacramento. “Financial documents are probably the most important because they give you a look at the reserves they have, how much they’re spending, and if there might be assessments. So it’s really important to go through and read those documents thoroughly and understand what you’re getting into.” These financial documents give the new buyers insight as to how well the HOA manages its finances. They also spell out who’s in charge of the association, and how to get in touch with the property management company if there are any issues.What’s included in the HOA docs that buyers need to know about?
