Buying or Selling Your Home?
Buying a home?
What is the Purpose of a Community Association?
These goals are achieved by administering, maintaining and enhancing a real estate development through the establishment of a system of property rights, binding covenants and restrictions, and rules and regulations.
A community association combines the characteristics and activities of a local government, a business, and a community.
Owning Property in an Association
Many people do not understand what they are becoming part of when the purchase property that is governed by an association.
The disclosure statement signed by homebuyers when they contract to purchase a home within an association informs them that the association exists and gives them some basic information regarding such. However, those disclosures do not go into detail regarding the responsibilities and obligations that go along with owning property in an association.
There are some basic things both homebuyers and homeowners should know when purchasing and living in a community or condominium with an association.
- Do your homework about the association before you make an offer.
- Know who is in charge. Almost always the association is a non-profit corporation and is governed by a board of directors. The Board is either the declarant (developer/builder), or elected residents. Find out if the Board contracts with a professional management company or not.
- Know if your association is pre or post transition. The process of transferring control from the developer to the association residents is called ‘transition’. The developer has wide latitude to amend the documents and change development standards when in control.
- Ask for and read the governing documents before making an offer.
- Ask for and review the association financials. – Review the operating budget and make sure the reserve fund is adequate for future capital projects.
- Know that association fees (assessments) are required and that the board usually has the authority to impose special assessments.
- Know that you have to live by the rules or gain the support of the community to amend the governing documents and rules.
- Know that the board has the power to assess fines, restrict access to services, place liens, and foreclose.
- Know that association laws vary widely by state and are complicated. Right or wrong, lawsuits are expensive, time consuming and stressful. Better to educate yourself rather than becoming involved in a lawsuit.
- Don’t be a whiner if you don’t do your homework and purchase in a community with association issues. Your alternatives include accepting the issues, making things better by volunteering to serve, filing a lawsuit, or moving. Information adopted from https://www.hoa-usa.com
- Know the Rules – Understand and comply with the restrictive covenants, by-laws, and other rules and regulations.
- Know that you must pay your assessments on time.
- Do not ignore communications from your association, especially notices that may regard outstanding assessments, issues of compliance or fines. The board has the responsibility to govern fairly and consistently in the interest of all members, which includes placing liens or foreclosing for nonpayment of assessments and fines. Don’t let a minor fine escalate to the point that the association board must turn the matter over to an attorney. A fifty dollar fine can easily lead to five hundred dollars to five thousand dollars.
- You must maintain your property according to the governing documents and rules.
- Know that an Architectural Review Application and approval is generally required before making improvements. This typically includes sheds, fences, above ground pools, playground equipment and much more. This may also include paint colors, door styles, landscaping, and mailboxes.
- Know that your association has certain responsibilities to the membership including compliance with federal and state laws, fiduciary responsibility by board members, elections, meeting notices, meetings, due process and much more as defined in the covenants and bylaws.
- Stay informed and participate in the business of your homeowner association by reading the meeting minutes, attending the annual meeting, understanding the budget, and volunteering to serve on a committee or the board.
- Maintain a current address with your homeowner association. This is critical if you are a member of a homeowner association but do not live in the community. Examples include rental property, second homes, homes used by children in college or retired parents, or investment property intended for future construction.
- Know that if your home is rental property or occupied by others, ensure that tenants/occupants understand that they must also comply with certain restrictive covenants such as parking, pets, architectural changes, and other requirements. This may also include association rules regarding use of playgrounds, pools, tennis courts, parking and other common areas.
- Know who is in charge. Maintain contact information for an association representative. This may be an on-site employee, a management company, a board member, or the builder/developer. Information provided by https://www.hoa-usa.com.
Selling Your Home?
If you are preparing to sell your home, make sure you get all the association details that you will need to complete your real estate transaction.
To simplify the process, Spaces Management has partnered with HomeWise Docs to offer an effective process for ordering and delivering all of the information needed to complete a transaction including resale disclosures, statement of accounts, lender required documents and other closing documents required for your community.
Please refer your Realtor, Lender, or Closing Attorney to the Service Providers section of our website to use the HomeWise Docs links for all document requests for communities managed by Spaces. Creating an account is easy and they can start utilizing the system immediately. HomeWise representatives are also available to help with any questions they may have by calling 1-866-925-5004.
- Standard Lender Questionnaire Bundle – includes budget, insurance declaration page, Lender Questionnaire
- Premiere Lender Questionnaire Bundle – includes: Budget, insurance declaration page, lender questionnaire, Financials, Articles of Incorporation, Bylaws, CC+R’s, Special Assessments, and Litigation
- Statement of Account and Payoff Balance: Includes the financials, Articles of Incorporation, Bylaws, CC+R’s, Insurance Declaration page, Special Assessments and Litigation
Bank Owned Property Package
This package includes: Financials, Articles of Incorporations, Budget, Bylaws, Closing Statement of Account, Declaration-CC&R’s, Insurance Declaration Page, Litigation, Resale Certificate Disclosure, Rules and Regulations, Special Assessments, Unit Ledger, W-9.
Did You Know?
Most neighbors say their association plays a vital role in preserving the value and integrity of their individual investments.