No HOA Addendum in the executed contract (Austin: real estate, new home)

[georgeZ11]

I need some help regarding HOA addendum.
I have a contract on residential house in Austin, HOA is mandatory. I did not sign the HOA addendum it is not in the seller's executed contract.
I received the HOA infomation 5 days ago and I do not agree to the terms. So I want to back out. Option period is already passed. I think I might have a chance to get me earnest money back because the lack of HOA addendum. If there is such adendum, I am should I can back out with 7 days of receiving the HOA info.
I already terminated the contract by stating seller failed to provide HOA addendum and terminate the contract based on the above stated clause.

My question is, is such addendum required in this case? If so, who should be responsible for not putting the addendum in the first place? DO i have any chance to get my money back?

[iceshots]

Have you discussed this with your real estate agent. What do they say?

[TexasHorseLady]

Why was there no HOA Addendum? Did your agent not include it as part of the contract in your offer? Is this a resale or a new home?

[IC_deLight]

Originally Posted by georgeZ11

I need some help regarding HOA addendum.
I have a contract on residential house in Austin, HOA is mandatory. I did not sign the HOA addendum it is not in the seller's executed contract.
I received the HOA infomation 5 days ago and I do not agree to the terms. So I want to back out. Option period is already passed. I think I might have a chance to get me earnest money back because the lack of HOA addendum. If there is such adendum, I am should I can back out with 7 days of receiving the HOA info.
I already terminated the contract by stating seller failed to provide HOA addendum and terminate the contract based on the above stated clause.

My question is, is such addendum required in this case? If so, who should be responsible for not putting the addendum in the first place? DO i have any chance to get my money back?

Can you identify the subdivision and the name of the management company (if any)?

[georgeZ11]

My agent is not helping at all (since I want to back out). I received all the HOA information and it is resale.

Originally Posted by IC_deLight

Can you identify the subdivision and the name of the management company (if any)?

[IC_deLight]

Originally Posted by georgeZ11

My agent is not helping at all (since I want to back out). I received all the HOA information and it is resale.

I understand, but please provide the name of the 1) subdivision, and 2) management company (if any).

Obviously few facts have been provided, however, I think the failure to disclose that the property was subject to an HOA, assessments, and perpetual liens that are never paid off is an absolute failure to disclose a known material defect in the property. Too often, Realtors are only interested in "the Deal" not your wants. Do not let a Realtor tell you that an HOA is a minor, insignificant thing or that all homes have them. Do not be bullied into going to the closing table for a property that was misrepresented to you. Time is of the essence and you need to let your Realtor know immediately.

Please identify the subdivision and the management company

[ATXIronHorse]

Just out of curiosity, what about the HOA addendum turned you off?

[TexasHorseLady]

Normally, when I write an offer for a client and the property is subject to mandatory membership in an HOA, the Addendum is included as part of the offer and the box saying that it is part of the contract is checked. That's why I asked why there was no addendum and if it was new property - to try to get a feel for WHY there was no such addendum. The need for one if the buyer is concerned about such issues is not only spelled out in the contract that the buyer signs in order to make the offer, the fact that they should have an addendum is bolded in that contract.

If your agent is not being helpful simply because you want to back out of the contract, which is your right if you're doing it within the terms and deadlines of the contract, you might want to talk to the agent's broker. This is exactly the time that your agent should be representing your interests most.

IC_delight, your issues regarding HOAs are well known and documented on this forum, but this doesn't seem to be a matter of the HOA per se, but a contract matter and a resale matter. So the particular HOA and management company isn't really pertinent, I wouldn't think. Besides, it appears that the OP DID know that there was a HOA when they entered into the contract, just not the details of the restrictions, and it's those that they object to.

[Torontonian]

Originally Posted by georgeZ11

I think I might have a chance to get me earnest money back because the lack of HOA addendum. If there is such adendum, I am should I can back out with 7 days of receiving the HOA info.

My understanding is that the above addendum should've been the part of the contract and been prepared by your agent to protect your interests. It is not seller's responsibility to provide you with HOA rules and regulations unless requested in written (subject 22. Agreement of parties in the contract) and addendum itself (TREC #36-4) by the buyer

[IC_deLight]

Originally Posted by TexasHorseLady

IC_delight, your issues regarding HOAs are well known and documented on this forum, but this doesn't seem to be a matter of the HOA per se, but a contract matter and a resale matter. So the particular HOA and management company isn't really pertinent, I wouldn't think. Besides, it appears that the OP DID know that there was a HOA when they entered into the contract, just not the details of the restrictions, and it's those that they object to.

Not sure what the difference is intended between "resale" and "contract" matter. The OP had knowledge of the HOA recently. Although the facts might ultimately bear out your interpretation, the original post did not indicate with certainty that the OP had knowledge of the HOA at the time of the original contract.

My like or dislike of HOAs is irrelevant. I definitely dislike deceptive trade practices, fraud, etc. I also dislike real estate professionals that minimize the risk that an HOA represents to any buyer or the suggestion that the buyer gets to keep what they actually purchased when they purchase a home in an HOA.

Who is responsible for this lack of notice? Was the contract written by the listing agent? Did the real estate professional omit disclosure of the existence of the HOA?

There are numerous properties today being marketed as "unrestricted" when in fact the properties have restrictions. Try searching on MLS for "non-HOA" properties. I've personally had agents assure me that there was no HOA on a property only to find out after obtaining a copy of the restrictions that there was an HOA. The back-pedaling agent then absurdly suggested that the HOA would only be imposed for a few years. Yeah, sure. There are people in the Austin area who have purchased property they were assured was not in an HOA. Years later, they and all their neighbors who likewise understood there was no HOA are being told that there is an HOA.

Returning to the matter at hand, let's also look at the notice itself - "restrictive covenants will or have been recorded...." What a joke. The purpose of recordation is to provide notice. The danger is that the buyer is buying property that can have further restrictions imposed without their knowledge or consent. The copy of the restrictions provided is really illusory. The restrictions suggest a limitation on the restrictions that can be imposed and yet there is nothing to prevent additional restrictions from being imposed through restrictions, bylaws, or management agreement contracts that the prospective purchase will not be privvy to at the time of purchase.

Another glaring omission on all of these is the lack of disclosure as to whether the subdivision is a declarant-controlled subdivision. In such cases any restrictions can be unilaterally changed irrespective of the consent of the buyer. The changes are always to the detriment of the owner. This detail is important enough that it should appear on the TREC forms and not relegated to being buried in bylaw amendments in an optional resale certificate.

One nasty new trend is for declarants to impose transfer fees onto property - up to 0.5% of the property in some places now. Another one is requiring owners to purchase a certificate of compliance (i.e., pay the management company money) before they can sell their home. How about the "priority of payment" racket, where the management company re-characterizes the mandatory assessment payments against the owner's will? (This one is promoted heavily by the management companies that profit from this extortive practice) These will often be adopted as 'resolutions' that will not be provided to the buyer in the "resale certificate". The resale certificates have little value to anyone other than the management companies that sell them with no liability for their contents. Homeowners don't have these issues outside of HOAs.

One other note, some title companies are simply ordering the resale certificate as a matter of course. Why? Because the management companies won't provide the relevant financial information without receiving payment for a resale certificate. The management company is really acting as its own agent in these cases, not the agent of the HOA. Some management companies are particularly problematic for causing problems at closing and the title companies simply order the resale certificates to avoid problems. This could be one reason that the subdivision information just "showed up".

In this case, I would hope we could both agree that it would be in the best interest of the real estate professionals to try to accommodate the buyer's wishes rather than to force a "deal". I hope we can also both agree that time is of the essence.

As previously stated, the identity of the subdivision and the management company is of keen interest.