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Downtown Long Beach street view
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Real estate professionals should encourage prospective home buyers to
carefully consider what they’re buying into when they purchase a home
in an HOA community. Both condominiums and single family homes/townhouses may be part of an HOA. Many buyers who would like a single family home may find that in the same area, an HOA property may be more affordable for them, so the following should be considered.
Fact: California is one of three states with the most homes under HOAs, 37% of all homes in the state are in HOAs. The other two are Florida (45%) and Texas (20%). Nationally, HOAs represent about 30% of the U.S. housing stock, or over 75 million owners.
REALTORs® Must Disclose: Sellers, listing agents and buyer agents should disclose if a home is in an HOA
community, as this is considered a “material fact” under the REALTOR® Code of Ethics.
Agents who are REALTORS® must ensure that buyers and sellers are aware
of any facts that could affect their decision to buy, sell or lease,
says Deanne Rymarowicz, senior counsel of legal affairs at the National
Association of REALTORS®. During the due diligence period of a real
estate transaction, if not before, real estate professionals should
advise their buyer clients about the existence of a homeowners
association and stress the importance of obtaining and reviewing HOA
governing documents, she adds. Listing agents should ask their sellers
if an HOA exists in their community, as certain information, like
monthly or annual fees, special assessments and shared amenities, can be included in the MLS.
Many times a client expects their agent to review and interpret the HOA governing documents, but that would be considered an “unauthorized practice of
law,” which violates Article 13 of the REALTOR® Code of Ethics. For
example, agents should not interpret an HOA’s CC&Rs, bylaws or
budget, Rymarowicz cautions. Instead, agents should advise their clients
to consult an attorney with any questions.
An Information source:
Real estate professionals can help clients gather HOA documentation and
facilitate answers to their questions from sellers, the HOA board or
HOA management company. It should be noted that many property management companies respond only to requests from the seller/property owner/Board of Directors, in accordance with contract terms, so that buyers should submit information requests through their own agent, not directly contact the seller or management company. Also, agents should make sure that HOA
disclosures and information packets are delivered and received in a
timely fashion (in California they are usually provided to the escrow officer for distribution) as some states, such as California, allow buyers to terminate a purchase
contract within a certain period. “It’s incumbent on agents to make sure
the buyer is aware of any deadline to review information packets so
they can make the right determination for them,” Rymarowicz says.
There are many more consideratons about buying into an HOA, including rules about landscaping, monthly fee amounts, security, pets, parking, rental restrictions, insurance, financing, are just some of the features that should be reviewed when considering an HOA purchase. In California the buyer has a 17-day investigation period in the standard contract to receive and review the governing documents.
More Information about HOAs: https://www.doorloop.com/blog/hoa-statistics - There are now over 363,000 HOAs in the United States, there were about 10,000 in the 1970s.
I have listed and sold many HOA properties, and would be happy to answer your questions, or provide you with additional information about selling or purchasing in an HOA. Just let me know!
From "Navigating HOA Rules: Considerations for Real Estate Agents, Buyers and Sellers" by Melissa Dittman Tracey, National Association of REALTORS
Julia Huntsman, REALTOR, Broker |
http://www.abodes.realestate |
562-896-2609 |
California Lic. #01188996