HOA’s have pro’s and con’s.

Pro’s: some owners like the HOA protects the quality of life in the area with rules, management, costs, and human relations.

Con’s: some owners perceive the rules, management, costs, and human relations as burdensome, overbearing, incompetent, criminal, or undesirable.

SCR recommendations:

Alert all buyers to the existence of private owners associations and the pro’s and con’s so the buyer can evaluate the owners association information and decide if the property meets their needs/desires.

Alert all buyers to hire a law firm to investigate all aspects of the owners association (e.g. management, finances, rules, human relations).

Contract using SCR311 due diligence addendum (so can evaluate the HOA before the contract and during the due diligence period and walk if desired).

SCR310 contract states the buyers acknowledge having opportunity to inquire about owners association issues, common area issues, condo master deed issues, assigned parking/storage areas, memberships, lease issues, and financed equipment prior to contract.

Contract using LLR’s seller disclosure which has HOA questions.

Contract using SCR391 stating the seller will provide HOA documents within a time frame.

REALTORS® should alert buyers to investigate HOA issues and hire a law firm to investigate. Lawyers can title search public records and provide HOA documents.

Lawyers should be the persons providing the HOA documents.

REALTORS® should never provide HOA documents. REALTORS® providing the HOA documents might be sued if providing stale HOA documents.

Buyers should evaluate HOA’s prior to contract and during due diligence period, so the buyer can avoid buying undesired HOA issues or being sued for breaching a contract over HOA issues.

Buyers assume all HOA risks if buyers fail to evaluate the HOA issues prior to contract or during the due diligence period.

REALTORS® have ethical duties to be competent and look after their client’s best interests. Buyers who are surprised, upset, or harmed by HOA rules will often file "post-closing" ethics complaints and license law complaints and lawsuits against their buyer rep and buyer rep BIC. The above recommendations can help manage these risks.

Lawyers who investigate an HOA and provide HOA documents to buyers is the best risk defense. Quality investigation. Quality documents from the courthouse. Shifts liability from REALTORS®. REALTORS® should avoid practicing law (e.g. felony crime, ethics violation).

REALTORS® often have HOA documents from prior closings. Keep in mind that HOA documents can change after that closing. So those HOA documents can go stale quickly.

Posted by: Byron King on 08/21/19 (This information is only accurate as of 08/21/19. You must contact SCR for updates and changes to this information after 08/21/19 as laws and regulations may change over time. SCR 803-772-5206 or email info at screaltors.org)