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seller received when they purchased the home fulfilled their obligation to the buyer, even though the information was out of date and incomplete.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

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.

Urban Living Makes a Comeback!

by Dan Krell

As the real estate market struggles to find a foothold, many are already speculating on the next real estate boom. The next real estate boom will not be as widespread nor will it be all inclusive as the last market surge; however, some speculate that it will be a highly competitive market nonetheless. The next wave in real estate will be localized to the downtown districts and surrounding neighborhoods of urban centers as a result of the (seemingly) ever increasing fuel and commuting costs.

A 1998 Brookings Institute and Fannie Mae study projected that urban living will attract more residences to the downtown areas. The study projected growth through 2010 in twenty-four cities around the country and used a very conservative definition of downtown (usually the financial districts) and did not include the surrounding neighborhoods. It was projected that some cities will have modest growth while other cities will have explosive growth (Baltimore’s downtown population was projected to increase 5.8%, while Cleveland’s downtown population was projected to increase 228.1%).

The economics of energy is not only affecting grains and food prices, it is influencing real estate trends as well. The recent sharp increase in gas prices and road congestion are making many re-think their home location. Suburban home owners as well as home buyers are looking to move closer to their jobs and save possibly thousands of dollars per year. A National Association of Realtors study reported that 28% of home owners surveyed indicated that high fuel costs were a decision to sell their home, while 40% of home buyers surveyed indicated that high fuel and commuting costs offset the higher home prices closer to the city center. Based on the Washington Metropolitan Area Transit Authority cost calculator (, eliminating a drive of 15 miles round trip can save over $500 per month or $6,000 per year (the figure is based on the GSA reimbursement rate).

Not everyone who is moving “inward” is doing so for work. Many moving closer to downtown areas are expressing the desire to be able to walk to stores and entertainment, while others are drawn to the unique architecture of the older homes.

Local downtown areas have been undergoing urban renewal for years. Large renewal projects that include modern amenities have been designed to draw commercial activity as well as attract residences. With a vision of the future, builders have planned and designed high density developments as well as many mixed use (residential and commercial) urban projects to keep up with the anticipated demand for urban living.

Although not everyone wants to live close to the urban centers and downtown areas, home builders did get the message that many do want to live close to amenities. New suburban communities are designed around existing or new town centers that include shopping, entertainment and access to mass transportation (or are close to metro stations).

If you are considering moving closer to (any) downtown area, don’t let the home prices discourage you. If you consider your commuting costs (including gas, parking, time in traffic) from the suburbs as well as proximity to amenities, your urban home purchase may be more attractive.

This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of May 5, 2008. Copyright © 2008 Dan Krell.

Condo Craze or Just a Phase?

by Dan Krell © 2007

When you think of a condo, what may come to mind is the typical flat in a building. However, condos come in many shapes and sizes, including duplexes, townhomes and semi-detached homes. The term condo is actually in reference to ownership, rather than style of home. Condominium ownership means that your home is part of a condominium association that owns and maintains common areas, while you own the interior space of your unit. The common areas typically include the building exterior and common grounds as well as amenities, such as a pool or play ground.

Everyone in who owns a unit in the association pays a fee, typically monthly, for maintenance costs. Condo fees vary depending on the size of the association, types of amenities, and whether or not utilities are included.

For some, living in a condo offers convenience and worry free living that a single family home does not. Many condos developments are convenient to the amenities of downtown areas, such as Rockville, Bethesda, Gaithersburg, and Silver Spring. These homes can be close to metro too, reducing your need to drive a car. Additionally condo ownership typically means that you don’t have to concern yourself with mowing a lawn or repairing a roof, as the association takes responsibility for these things.

Condo living is an affordable opportunity to owning a home. Compared to single family homes and townhomes, condos tend to be less expensive and a viable option for many first time homeowners.

There is a downside to condo ownership, however. Although condos may be more affordable, history suggests that they do not appreciate as fast as other types of homes. Because some condo buildings appear densely populated, some neighbors can be noisy. Additionally, the level of maintenance may vary depending on the condo association and management company.

If you are considering purchasing a condo, here are some ideas to assist you. First, exercise your right under Maryland law to review the condo docs. The condo docs include the association rules and bylaws as well as a recent budget, which includes reserve funds for emergencies. Reviewing the condo docs can reveal rules that may impact your lifestyle, such as having a pet. Additionally, the budget and reserves can reveal how well the association manages condo funds.

If you have an opportunity, attend a board meeting to get a feel for what is happening within the association. Internal politics can impact the way the condo is managed. If you want to have input in the direction of the condo association, get involved with the association board.

Although the condo association has an insurance policy that covers the physical building, you may want to consider a policy to cover your possessions inside your unit.

Parking in your development can be easy or it could be a problem. You may have one or two reserved spaces for your unit. However, if your condo is convenient to metro or other amenities, you may find non-residents taking advantage of this.

No matter how you look at it, purchasing a condo can be a practical and affordable home for any home buyer. As there are many considerations when purchasing a condo, ask your Realtor for additional resources and ideas in helping you decide on the best home.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of April 30, 2007. Copyright © 2007 Dan Krell.