MD home sellers and HOA docs

MD home sellers – be aware of your obligation to provide HOA or condo docs.

townhomesAs time passes, real estate contracts become increasingly lengthy. Both home sellers and buyers are incredulous when they first encounter the many pages of a home sale contract. To put it in perspective for them, I often retell the stories that I have been told about how a time in the past real estate transactions were conducted with one or two page contracts, and sometimes even on just a handshake. To offer some solace to the seller/buyer, I assure them that there is importance to the seemingly endless number of notices and clauses; many notices are reminders to the seller and buyer about their obligations in the transaction.

A good example of the need for such notices is the seller’s obligation to provide the buyer with HOA/condo information and docs. In the past, this obligation was often taken lightly; sellers would often dig out the association rules which they were given when they purchased the home, dust them off and give them to the home buyer; with little expectation that the information would be reviewed.

Unfortunately, this practice is still occasionally being attempted by unknowing sellers and their agents. Several years ago, an agent asserted that an ancient looking manila envelope (that was stained because it was most likely used as a coaster and trivet) that the seller received when they purchased the home fulfilled their obligation to the buyer, even though the information was out of date and incomplete.

Providing up to date and complete documents to the home buyer allows the buyer not only to review the association rules, but also makes them aware of the financial and legal standing of the association.

As a home seller, it’s important for you to understand the need to fulfill your obligation with regard to providing HOA/condo association information, and to do it quickly. The buyer may “cancel” (void) the contract if they do not receive all the required information; and the buyer has a review period (five days to review HOA docs, and seven days to review condo docs), during which they may “cancel” (void) the contract.

Most resale packages that are obtained from HOA/condo associations contain all the documents required, however, it’s still up to you the seller to ensure all the required documents are enclosed in the package. To be more specific, local HOA/condo real estate disclosure forms were recently changed for clarity; including asking the seller to list fees, assessments, association contacts, and other information.

Home buyers are informed consumers; many are aware they are required to receive specific information about the HOA/condo from the home seller. And although the review period for the HOA/condo docs may have been abused by home buyers in the past, during the hectic sellers market when the review period was used as an “out” from making offers on multiple properties; today, home buyers take the review period seriously and many read the docs. You might even get a question or two about the bylaws/rules from an astute home buyer.

If you’re planning a sale of your home that is located within a homeowners association or a condo, you’re obligated to provide the home buyer specific information about your association. Besides your listing agent, who can guide you through the requirements and your obligations; your HOA/condo association and its management company are helpful sources to obtain the necessary information.

Original published at https://dankrell.com/blog/2012/10/25/md-home-sellers-and-hoa-docs/

by Dan Krell

This article is not intended to provide nor should it be relied upon for legal and financial advice.  Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Is Your HOA Out of Control?

by Dan Krell © 2008
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If you live in a common ownership community (such as homeowners association, condo association, or cooperative) you may have experienced a confrontation with your community management company or board of directors. Disputes between home owners and their association boards and/or community management companies often arise out of miscommunication, poor communication, and sometimes sheer pride. Unfortunately, disputes can get out of hand when the parties are committed in being “correct” rather than being committed to resolution.

Many times, home owners are confronted by their community’s management company and/or board members because of violations of the community’s Covenants, Conditions, and Restrictions convents and regulations (also known as governing documents). The community is usually within their right as long as the compliance “requests” are communicated within the legal and governing documents guidelines. Usually compliance with the governing documents is not an issue as most residents act in accordance within their community guidelines. However, other home owners attempt to fight their communities through escalation, which usually ends up in court. If the association acts within its governing documents as well as legal guidelines, the court will usually rule in favor of the association.

Sometimes, frivolous laws suits are filed by disgruntled home owners, whom have personal disagreements and disputes with their board members or the community management company. The courts typically do not look kindly on frivolous law suits and will usually award the common ownership community with remuneration of their attorney’s fees.

However, what happens if your common ownership community does not act within the law and/or the governing documents? There is no shortage of stories of abuse and corruption within community management companies and community directors. According to the American Homeowners Resource Center (AHRC.com) and the Maryland Homeowners Association (Marylandhomeownersassociation.org), community home owners have legal rights that should not be violated. The Maryland Homeowners Association cites the Code of Maryland as the source for local home owner rights. The ongoing potential for abuse and corruption within common ownership communities was underscored when the State legislature created the Task Force on Common Ownership Communities in 2005 to look into the problem. The Task Force’s recommendations (published in 2006) include dispute resolution models that were modeled after the Montgomery County Commission on Common Ownership Communities.

The Montgomery County Commission on Common Ownership Communities (housed within the Montgomery County Office of Consumer Protection) was established in 1991 and is committed to providing owners, tenants, residents, boards of directors, and community management companies with information, assistance, and impartial dispute resolution programs. The CCOC provides these services to the public with integrity, transparency, and a commitment to the highest ethical standards.

An additional resource for home owners is the Maryland’s Attorney General’s office of Consumer Protection. The OAG has been authorized to enforce the Maryland Condominium Act, and as of 2007 the office is authorized to enforce the Maryland Homeowners Association Act (as a result of the Task Force on Common Ownership Communities).

Responsible community management is not a one sided affair, nor should it be evaded. Unfortunately, everyone will not agree all the time and disputes will arise. Fortunately, neutral resources exist to help community management companies, boards of directors and home owners work out a resolution before things get out of hand.

This article is not intended to provide nor should it be relied upon for legal and financial advice. Copyright © 2008 Dan Krell.

Originally published at https://dankrell.com/blog/2008/07/16/is-your-hoa-out-of-control-association-disputes-can-be-resolved/