What Happens to a Homeowners Association (HOA) when a Neighbor Decides to Sell Their House
When a neighbor in a Homeowners Association (HOA) decides to sell their house, the process is largely administrative and transactional. The HOA itself remains intact, with the new owner becoming a part of the association upon the sale of the property. Here's an in-depth look into the timeline and requirements involved in this process.
The Initial Process
When a potential buyer makes an offer on a house within an HOA, with the stipulation of conducting due diligence, the buyer's agent will send a request for a resale certificate to the seller's agent. This certificate includes pertinent questions and copies of governing documents, such as the Covenants, Conditions, and Restrictions (CCRs), bylaws, and rules. This request is processed by the property management company, which is in charge of receiving and managing the necessary documentation.
If the neighbor is a member of the HOA, they can expect to receive a request for these documents from the realtor or title company. The property management company will bill the recipient according to a fee schedule and send the documents accordingly. If the neighbor is outside the HOA, there is no need for such a request, as it is not relevant to them.
The Transition Process
The HOA and its operations do not change significantly just because the neighbor is selling their home. There is no automatic declaration of a holiday or social event by the board members. The HOA continues to operate as usual, ensuring that all homeowners adhere to the established rules and guidelines.
The HOA remains in place with the property, and the new owner will automatically become a member of the HOA. This means that, from the moment of sale, the new owner is responsible for paying HOA fees, subject to the agreement and contract terms.
Financial Obligations and Transfer Fees
After the sale of the house, the current homeowner is still responsible for paying HOA fees until the closing date. The new homeowner will then take over the payment responsibilities as per the contract established during the sale process. However, to ensure a smooth and legal transfer of ownership, the new owner may be required to pay additional transfer fees to the HOA. These fees cover the costs associated with updating the membership records and ensuring that the new owner is accurately recorded as a member of the HOA.
These fees can vary and are typically outlined in the HOA's documents and guidelines. It is essential for potential buyers to be aware of these fees during the due diligence phase to avoid any surprises.
Conclusion
In conclusion, when a neighbor decides to sell their house in a HOA community, the HOA itself remains operational and unaltered. The new owner becomes a member of the HOA, and their obligations include meeting HOA fee requirements. The transition process involves both parties adhering to the governing documents and ensuring a smooth and legal transfer of ownership.
Understanding the process and being prepared for the potential financial obligations can help ensure a successful sale and transition within the HOA. If you have any questions or need further clarification, feel free to reach out to your HOA board or management company for assistance.