Understanding HOA Dues When Selling a House with an HOA in Florida

When selling a house in Florida that is managed by a Homeowners Association (HOA), it's important to understand how HOA dues are handled. This process often mirrors the handling of other regular utility payments made during home ownership. However, there are specific procedures and documents involved that buyers and sellers must be aware of.

How HOA Dues Are Handled at Closing

The standard procedure in Florida is similar to that in other parts of the country. When a property is sold, all associated costs are prorated. This means the seller pays for the portion of HOA fees that cover the period up to the closing date, while the new owner takes over the remaining fees. This applies to other bills as well, such as taxes, water and sewer bills, and HOA fees.

Prorating HOA Dues

The principle of prorating involves dividing the total amount of HOA fees for the year based on the specific period the seller and buyer will occupy the home. For example, if the HOA fees for the year are $1,200 and the closing date is mid-year, the seller would be responsible for the first six months of the fees, and the buyer would pay the remaining six months.

Signed Statements and Forms

A form known as the '6D' is a key document in the Florida closing process. It is signed by a trustee of the HOA indicating that the condo fees are paid up to date. This document is essential and must be presented to the closing agent at the time of closing to avoid any discrepancies or disputes.

Responsibility for Future HOA Dues

Once the sale is complete, the buyer takes on the responsibility for all future HOA dues. This is important because buyers should understand the financial obligations that come with purchasing a property within an HOA. It's crucial that buyers perform due diligence and check for any liens or unpaid bills that could come back to haunt them.

Liens and Back Dues

HOAs often file liens on properties for unpaid dues. If there are any back dues prior to the sale, the seller may be responsible for paying these off, and the sale proceeds may be used to settle these debts. However, if the HOA has not filed a lien and the back dues are clear, the buyer is solely responsible for any future dues.

Additional Financial Responsibilities

Beyond the HOA dues, buyers should also be aware of other financial responsibilities. Some individuals may find themselves in a situation where they have more than just a mortgage on their home, which can result in negative equity. This can happen when an individual is over/under, meaning they are in debt more than just the mortgage and the available equity. Therefore, it's important to understand the current financial state of the home and any associated debts.

Key Takeaways

HOA dues are prorated at the closing of a property sale in Florida. A '6D' form is signed by an HOA trustee to confirm that dues are paid up to date. The buyer is responsible for future HOA dues after the sale. Back dues and liens must be cleared before the sale. Financial responsibility is shared between the seller and buyer until closing. Buyers should perform due diligence to understand the financial obligations.

Understanding the process of how HOA dues are handled during a property sale in Florida can help ensure a smoother transaction for both buyers and sellers. By familiarizing oneself with these procedures and responsibilities, it's possible to avoid any unpleasant surprises and ensure a successful sale.