In California, specific disclosures are required by law to be provided to HOA members upon request, allowing them to relay the information to prospective homebuyers. This checklist outlines the important documents that buyers, sellers, and managers should be aware of before closing escrow.
Buyers should review governing documents such as CC&R’s, bylaws, and rules/regulations in detail before purchasing a property. Annual reports like the Annual Budget Report and Annual Policy Statement provide crucial financial and policy information about the HOA.
Buyers should also be informed about assessments, unresolved problems, unique issues like age restrictions, and any defect lawsuits the HOA has pursued. Sellers are required to disclose any delinquent assessments, fines, or violations on the property.
Realtors are advised to request these documents early in the selling process to avoid rush fees and to allow time for compliance. Additionally, buyers may request additional documents like financial reports, board meeting minutes, and reserve studies to better understand the association’s operations.
It is important for HOAs and managers to be prepared to provide these disclosures as they provide valuable information for prospective buyers. Ultimately, buyers should use this information to become informed and responsible members of their HOA community. Kelly G. Richardson, a Partner of Richardson Ober LLP, emphasizes the importance of these disclosures in ensuring a smooth real estate transaction.
For further information and inquiries, contact Kelly@roattorneys.com.
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