Knowledge Monday - Closing on a Property with a Homeowner's Association
A homeowner’s association is an organization in a community or condominium that makes and enforces rules for the properties and residents. As a buyer or seller of a property with a homeowner’s association, there are a few things that you should keep in mind.
As a buyer it is important to note that you automatically become a member of the association and are required to pay the monthly fees once you purchase the property. Homeowner’s associations have a magnitude of power as they can place a lien on a property due to any violations or outstanding fees that a homeowner has. Once an association places a lien on the property, it has the authority to foreclose on that property and affect your right of ownership. Thus, as a buyer, you want to make sure that a title search is conducted on the property. A title search will reveal whether there are any association liens on this future investment. There are occasions where the current owner is unaware of the association lien or the lien was mistakenly placed on the property, thus it is imperative that any issues are found before you close on the property.
Additionally, before closing on a property all association fees must be satisfied. In order to have a concrete figure on the specific amount of fees that are due to an association, a closing attorney will have to request a closing letter from the association. Any outstanding balance of association fees by the seller must be paid by closing. Additionally, some associations may require that a buyer pay future assessments at the time of closing due to initiation fees that the association might have in place. It is important to keep in mind that both buyers and sellers might have to pay association fees at the time of closing, which will affect the closing amount.
When selling your home, as a seller it is a good idea to inform your homeowner’s association that you are selling the property. Many homeowner’s association have set rules that a seller and/or buyer have to follow before the property is sold, including a homeowner resale inspection.
If you would like to discuss closing on your property with a homeowner's association, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email firstname.lastname@example.org to schedule a consultation.
*Disclaimer: this blog post is not intended to be legal advice. *