HOMEOWNERS ASSOCIATION INFO
When listing a home, the Seller must fill out the HOA addendum accurately and disclose the name and number of the Homeowners Association management, a contact and the amount of fees. This document tells what is covered under the HOA fees and whether there are any pending assessments, unsatisfied judgments or pending legal action. Often law suits are filed against Homeowners Associations by disgruntled owners or by the HOA against owners for delinquent fees or for non-compliance with rules. The HOA should have a line item in the budget to allow for all such expenses.
When a Buyer purchases a home that has an HOA, he is automatically obligated under the law to pay the fees and comply with the rules. He should ask the Seller’s agent for all the Covenants and Restrictions and By-Laws and review them so there won’t be any surprises (such as finding out he can’t store his boat in his back yard or have a commercial truck with signage on it in the driveway). HOAs for condos and town houses usually have exterior building maintenance and repair covered in the fees. However, the Buyer should ask if there are any exceptions such as replacing windows and doors (especially any "fogged windows").
The HOA disclosure must be obtained from the Seller’s agent, signed by the Buyer, and attached to the contract. The Seller has a duty to deliver any documents to the Buyer that are “in his possession or reasonably available to the Seller.” However, the Seller is not warranting that the documents are accurate or complete. The Buyer is expected to look out for his own best interests and conduct a reasonably thorough investigation of the property before making a decision to proceed with the purchase. The County Register of Deeds and the HOA management company are resources. The closing attorney should double check for any liens or judgments of record against the HOA as well as against the home.
The Buyer will want to see the budget and ideally there should be a reserve for major improvements. There may be an Architectural Review Board, a subcommittee of owners, who will approve or disapprove any additions to the home or even a change of exterior paint color. If buying pre-construction, the builder/developer may still be in control of the HOA and only turn it over to the owners after all or most of the homes and lots are sold. Even a lot is subject to the HOA fees.. Homeowners should attend the meetings, which are held at least annually, to have a voice in what decisions are made.
Some neighborhoods have dual associations, so both of them should be in the HOA disclosure. For example, Landfall and Porters Neck have a blanket association to take care of common areas, ponds, storm water runoff, private streets and security gates. Since there are several sub-communities of different lot sizes and home sizes within those large plantations, some owners take care of their own yard work and others have a separate association to maintain the yards or perhaps just the front yard. Regular yard maintenance regimes will help maintain the value of the homes in a community.
This summary is a general guideline only, is to the best of our knowledge, and the Buyer should not rely solely on this but should consult his closing attorney with any questions.