Selling A Home In A HOA

If you live in an HOA community, the association can prevent you from selling your home if there are outstanding dues or there’s a lien on the property. The latter can occur if the homeowner has unpaid fines or dues owed to the HOA. 

Some HOAs may fine homeowners for violations of community rules (neglecting landscape duties, making unauthorized changes to the home’s architecture, etc.). If the homeowner refuses to pay those fines and a lien is placed on their property, they won’t be able to sell until the situation is resolved. 

When this happens, it's crucial to address the outstanding issues promptly. Clearing any dues, resolving violations or settling penalties is typically necessary to proceed with the sale and ensure a smooth transition of ownership to the new buyer.

Selling a Home in HOA

If you live in an HOA community and are looking to sell your home, there are several things you’ll need to consider. While the goal of an HOA is to enhance curb appeal, maintain the quality of the neighborhood and preserve property values, some buyers may find the concept stifling and off-putting. Many people also dislike periodic assessments – which can potentially be quite high – for community features they won’t use. 

Strict rules, regulations and standards, such as landscaping standards, architectural guidelines and property upkeep requirements are simply not a good fit for some buyers, which means you need to make it crystal clear your home is in HOA when putting your house up for sale. Doing so allows you to narrow down your audience and attract potential buyers who appreciate the benefits and standards of the community, while also being transparent about the expectations and restrictions that come with HOA living.

What HOA Documents Do I Need to Provide to the Buyer?

A homeowners’ association doesn’t take part in the home sale process between the seller and the buyer. This means it’s your duty to disclose all pertinent HOA documents to the buyer.

The most common documents you must disclose include:

• Governing Documents: These include the Declaration of Covenants, Conditions, and Restrictions (CC&R), the Articles of Incorporation and the bylaws. These documents outline the rules, regulations and structure of the HOA.
• Resale Certificate: This document provides an overview of the HOA's financial status, outstanding dues or assessments on the property, pending legal actions and any ongoing or planned special assessments. It also outlines the current HOA fees and other relevant financial information.
• Meeting Minutes: Copies of recent HOA meeting minutes may be required to provide insight into recent decisions, discussions and actions taken by the HOA's board of directors. This helps the buyer understand the community's governance.
• Financial Statements: Buyers often request the HOA's financial statements, including the operating budget and reserve fund analysis. These documents offer insight into the HOA's financial stability and planning for future expenses.
• Insurance Information: Details on the HOA's insurance policies, including general liability and property insurance, are crucial for understanding the extent of coverage and any potential gaps.
• Membership Transfer Documents: These documents facilitate the transfer of HOA membership from the seller to the buyer, outlining the responsibilities and obligations of both parties.
• Association Contact Information: Provide the buyer with contact information for the HOA's management company or board members so they can inquire about specific questions or concerns.
• Maintenance and Repair Records: While not always required, providing records of any recent maintenance or repairs performed by the HOA can offer assurance to the buyer regarding the upkeep of common areas and amenities.

Who Pays for HOA Disclosure Documents?

Typically, the seller is responsible for paying for HOA disclosure documents and providing them to the buyer. Because the list of documents is often extensive, it’s a good idea to set aside a few hundred dollars to cover the fees associated with requesting them.

As an alternative, many HOA companies with websites allow homeowners to create accounts and access at least some of the documents online.

You may also be able to negotiate with the buyer to cover the costs of the disclosure documents, but this option isn’t allowed everywhere. For example, the laws in California state it’s always the seller’s responsibility to pay the disclosure documents fee.

Are You Ready to Sell Your Home in an HOA?

While not all people see the value in paying HOA fees, some buyers prefer and even seek homes located in HOAs. In many cases, these communities offer better amenities, roads, infrastructure or security than neighborhoods without an HOA. As such, your home can be a valuable asset in the real estate market.

At 72SOLD, we know how to highlight the unique benefits of your community, attract serious buyers and help you quickly achieve a financially satisfying sale.

Learn why working with us is better than selling your home traditionally by visiting our website.