Any homeowner in a community where a homeowner’s association is in place is familiar with the pros-and-cons of being part of such a community.
While the homeowner association (HOA) can help maintain the overall look and feel of a community by setting standards for such things as what paint colors are acceptable, how many cars can be parked in the driveway, and whether or not sheds or outbuildings are allowed, for more ‘independent-minded’ people, HOA rules and restrictions often run counter to what they want to do with their own home and property.
But regardless of how you feel about HOA governance, one aspect of living in an HOA community may go unnoticed until it’s time to sell your home.
Legally, sellers who live in HOA communities and enter into a sales contract with buyers, must provide them with the HOA documents to review before settlement. If buyers find they do not like what’s contained in the HOA information, they can withdraw their offer and have their deposit returned, provided they have complied with the terms stated in the contract.
While the HOA disclosure is the law and an essential part of the home buying-selling process, there are those who feel some associations are charging excessive fees for documents the homeowner had already paid for when the home was purchased.
As example, one company told a seller that the HOA documents, or ‘resale package,’ would cost $225 (for 20-day turnaround), or $275 to ‘rush’ the documents, meaning a 14-day turnaround. The ‘resale certificate,’ which an HOA representative explained was only “good” for 30 days, would cost $150; $200 if rushed.
With many companies keeping documents available online, some sellers feel this is an “excessive” charge for “doing nothing.”
So what can sellers who object to these fees do?
Maryland has a depository within the department of land records in each county, where homeowner associations file their documents. It’s a public website, and while navigating the website can be cumbersome, the information is available, if the association has filed their documents in the depository.
“It’s not enough to file…with land records,” said one county employee who did not want to be named. “[Documents] have to be filed in the depository.”
While the law does not require a seller to purchase the documents from the association, it does require the seller to make the documents available to buyers before settlement.
So, are HOA document fees fair, or excessive?
It really depends on how the homeowners involved in those communities feel. Some see it as the “price” of living in a community where standards are established to maintain the aesthetic character of that community.
While others, who may have embraced that philosophy when they bought into that community, feel that having to pay a few hundred dollars upon leaving the community is an expense they hadn’t considered.
The caveat: Know as much as you can about the homeowner’s association and how it’s managed before you buy into it. Once in, attend meetings and keep up-to-date on what your association is doing. By becoming part of the process, you might have a better chance of changing it.