Sellers typically have the best notice of all HOA issues (e.g. mailers, neighbors talk and complain and organize and social media, meetings, bills, see the issues, live the issues). Always get a seller HOA disclosure and seller disclosure in the contract and transaction. Because of the above, sellers typically have more knowledge of the property’s HOA issues than the closing attorney and the brokerages. So require the sellers to divulge the information in the seller disclosure and SCR391.

SCR contracts alert the buyers to inspect the HOA prior to contract. Section #3 of SCR310.

"Buyer acknowledges opportunity to inquire about owners association issues, common area issues, condominium master deed issues, assigned parking/storage areas, memberships, lease issues, and financed equipment prior to signing Contract."

SCR contracts alert buyers to inspect all issues related to the property including off-site issues. Section #9 of SCR310.

"Buyer and SC licensed and insured inspectors reasonably perform any reasonable ultimately non-destructive examination and make reasonable record of the property with reasonable notice to seller through closing including off-site conditions and any issues related to the property at buyer expense."

SCR contracts can also be a due diligence contract where the buyer inspects during contract and can timely/properly terminate if the HOA issues do not meet the buyer’s needs/desires (SCR310+SCR311).

SCR contracts can put the burden of seller timely delivering copies of CCR’s, financials, master deeds, zoning, restrictions, covenants to the buyers (best to receive during due diligence period so buyer can timely/properly terminate if the issues do not meet the buyer’s needs/desires).

SCR contracts state the buyer can inspect all issues (including HOA issues) so buyers who are concerned about the HOA management could hire a private investigator and law firm and financial expert to inspect the HOA management for all issues that the buyer desires they inspect (e.g. management, reserves, liability, finances, income, spending, satisfaction, insurance, amenities, complaints, golf course, pool, memberships).

HOA’s have pro’s and con’s.

HOA’s sometimes help hold/increase property values and quality of life.

HOA’s sometimes generate complaints of unreasonable management or financial mismanagement or other issues/problems.

Buyers should investigate the HOA.

Buyers should hire experts to investigate the HOA.

Buyers should require the seller to provide documents (e.g. seller disclosures, SCR391 HOA documents/financials).

REALTORS® are experts in marketing properties. REALTORS® are not HOA investigators. Consumers must understand that REALTORS® handle the marketing of the real estate and other experts handle other real estate issues. Consumers must choose the services they desire to pay to acquire.

REALTORS® have a duty to disclose material adverse facts that the REALTOR® has actual knowledge about the material adverse fact…but there are many issues including HOA issues that the REALTOR® does not have actual knowledge because the REALTOR® is not trained, licensed, directed, nor paid to investigate all HOA issues.

Buyers wanting to know about the HOA issues should hire a law firm and private investigator and financial expert to investigate the HOA issues that the buyer wants to learn prior to contract and during due diligence contract. Without a due diligence contract, the buyer might not be able to terminate upon discovering something about the HOA that does not meet the buyer’s desires. Always use a due diligence contract and always investigate the HOA prior to contract and during the due diligence period. Buyers can even research the HOA online to supplement the work of the HOA experts that the buyer hires.

Posted by: Byron King on 12/18/18 (This information is only accurate as of 12/18/18. You must contact SCR for updates and changes to this information after 12/18/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at