The home owners association’s (HOA) common interest community (CIC) governing documents contain the rules, regulations, and all other contractual terms by which homeowners in that community are bound. If a property is part of an association, the buyer becomes part of the association upon purchasing that property. Per the contract, the seller is obligated to provide the Association Documents to the buyer.
HOA documents need to be disclosed because:
- the new homeowners need to know the HOA’s Covenants, Conditions and Restrictions so they can abide by them
- the new homeowners need to know when, where and how much they need to pay per month in HOA fees
- the new homeowners need to know of any legal concerns or issues related to the HOA.
Below is an overview of what these documents mean and how they can be obtained.
HOA Status Letter
Once a contract is received by the title company (and the home for sale is part of an HOA), the title company will order a HOA status letter. It gives the closer a written status of how much the dues are for the property, when they are charged, current standing of payment, and the balance of any outstanding amounts the title company needs to collect at closing. This letter may contain a transfer fee (sometimes called a change of record fee) or a status letter fee charge, or sometimes both.
In most cases, HOA management companies are requiring a fee to compile and send the necessary documents. They may also require a seperate fee for a status letter and transfer fees upfront. Land Title and/or Comdocpro will pay these upfront fees and then collect the fee from paying customers at closing.
The CIC documents should be ordered as soon as possible after the contract is executed, in order to meet the deadline specified in the contract. They provide the buyer with the financial status of the HOA, meeting minutes, declarations, by-laws, rules and regulations, etc., from the homeowner’s association. Some associations will provide these free of charge to the Seller directly; while other HOAs will charge for them.
The CIC/Association Documents also include the CCR’s which are disclosed on the Exceptions page of the title commitment. Land Title will automatically include a copy of the CCRS with the commitment, either as a link on the electronic version of the commitment, or as a paper copy sent out with the first commitment.
Land Title HOA Department
Land Title customers (with properties located in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Eagle, Elbert, El Paso, Jefferson, Larimer and Weld) have the benefit of the expertise of Land Title’s full service HOA Department called ComDocPro, which will provide the association transaction documents for a fee (with or without Land Title closing). The HOA Department staff is familiar with the nuances of the different local HOAs, stays up-to-date on legislative changes for homeowners associations, and offers CE classes to real estate agents. ComDocPro also offers a do-it-yourself (DIY) tool for home buyers.
Visit comdocpro.com for more information on ordering and pricing for HOA documents.