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It's part of the disclosures provided by the seller, just like a property disclosure. Are they a pain to obtain? Sure they are. Too bad. The seller needs to get off their duff.
If you have a buyers agent, then THEY should be calling the LISTING agent and requesting that information, which should be as standard as asking for the seller's disclosure. Then it's up to the listing agent to scare up that information.
As a listing agent, we always request that information up front, before the listing is taken, and we have those docs available on-line to other agents. Easier for everyone. Every time we fail to get them, from the homeowner dragging their feet, etc., we always end up scrambling for them as a contract is being written. So we really try to get them ahead of time.
Thank you dblackga,
I agree with all you have written and have relayed the information to my real estate agent. He's been notified that I am expecting this information or I will not consider this property (or any other), without it.
I'm looking at condo's and I want to make sure the HOA is in good standing financial. I also would like to know what repairs have been done, or are scheduled to be done.
This is on a condo I'm particularly interested in.
How do I obtain this information? My real estate agent said it's my due diligence to call the Management Company of said property and ask them. I'm not sure who the management company is, and I think it's "self managed."
I would think my agent would contact the sellers agent for this information and pass it on to me.
Confused.
At every condo we clean, there is a bulletin board with contact info -- you will find the management company on that. Contact them and ask what you need to do get the information you want.
I agree with all you have written and have relayed the information to my real estate agent. He's been notified that I am expecting this information or I will not consider this property (or any other), without it.
I doubt if they will give all of the info to a person just looking. There is cost and time involved.
I have people call me for information on our condos all of the time. I give them financials, reserves and when needed, and answer any questions. I will not put a package together. That is hundreds of pages. When they go to escrow they get all of the info CULLY listed on disc. The cost is $150 split between buyer and seller. They can back out then if they don't like what they see.
The link one poster provided was about what buyers(in escrow) were entitled to, not lookers.
I'm looking at condo's and I want to make sure the HOA is in good standing financial. I also would like to know what repairs have been done, or are scheduled to be done.
This is on a condo I'm particularly interested in.
How do I obtain this information? My real estate agent said it's my due diligence to call the Management Company of said property and ask them. I'm not sure who the management company is, and I think it's "self managed."
I would think my agent would contact the sellers agent for this information and pass it on to me.
Confused.
I live in a HOA community that is a sort of crossbreed between condos and town homes. I also sit on the Board. I am not sure what the regulations are in your State, but here are what do not disclose:
1. Investments.
2. Contracts, contract negotiations.
3. Future projects in terms of finances or timeframe. If you ask us, we will tell you what we have in the pipeline, though.
4. Delinquent properties, totally private info for Board members only.
5. Origination of loans.
6. Grants. Sometimes we win grant money to do projects.
This above information are considered confidential, but we will and do discuss them at meetings.
And what we do disclose:
1. HOA assessment income.
2. Interest income.
3. Expenses, including administrative, office, postage, audit/accounting, grounds maintenance, and a few others.
4. Interest paid on loans and the principal repayment amount.
5. Utilities.
The financial discloser statement is only for the prior fiscal year, though, and is not held current for potential buyers. However, if a potential homebuyer were to inquire, we could print a year-to-date report.
thinkalot, I do like many things about the Disclosure Acts and the Ill sales contract. Particularly the reminders for what buyers and sellers might not think about.
Yes, those financials are very important up front to know up front, how well the association will survive, how well they are prepared for emergencies and lawsuits and new roof and siding, and repair to amenities; what utilities, amenities and maintenance are covered in the HOA fee and condo fee, etc. So actually what you tell people may cover most of it.
Also very important are some of the other things like the rules and regulations one lives under. Can make a major difference regarding how picky the board is, what the fine system is, number of pets, what one is allowed to do to one's condo and not allowed. I have an acquaintance who wanted to invest in some sort of double screening for her condo porch so that her cat would not tear the screen when he climbed it. A good plan for the future to keep from having to replace the screen so often and to keep her cat happy. But she was not allowed to do this. No forethought or creativity allowed...understandably had to be the usual single screening all her neighbors had. She had never considered that.
Just as with many home sale and purchase laws and customs, 'escrow' seems to mean different things in different areas. To me it is when the seller accepts the offer. I have to say, I don't like the idea of looking at properties that I might like after I research price and terms with my realtor and lender in order to go into contract and perhaps even negotiate with the seller.... to only then get the rules I have to live by and know what I'm responsible for.
I realize the legal definition of "prospective buyer" is any person negotiating to become an owner. But I think a sensible person looking at a HOA has the opportunity to know these days where they want to look in advance or pretty early on in the process.
Yes, a seller might not want to invest in a new book or disc with all this info in case they don't sell the unit. But, a good thing if someone has the info from not too long ago, or if it can be found someplace else.
I doubt if they will give all of the info to a person just looking. There is cost and time involved.
I have people call me for information on our condos all of the time. I give them financials, reserves and when needed, and answer any questions. I will not put a package together. That is hundreds of pages. When they go to escrow they get all of the info CULLY listed on disc. The cost is $150 split between buyer and seller. They can back out then if they don't like what they see.
The link one poster provided was about what buyers(in escrow) were entitled to, not lookers.
Sorry, but your reasons are not acceptable excuses. Why is it so hard to put a package together? The declaration and the CCRs don't change -- that's a PDF file. The by-laws might change occasionally -- but again, that's a PDF file. The only thing that might be a little cumbersome is a current budget -- but if the other things are in a PDF file, then spitting out a copy of last months' budget (you have to prepare it for the Board anyway, so what's the problem?) shouldn't be an overwhelming task. If the documents were readily available on my computer, I could email it to an inquiry in less than 60 seconds.
These docs could easily be posted on the HOA website -- but HOA management companies use the distribution of this information as a nice little money-maker. Some around here charge exorbitant amounts for an ELECTRONIC COPY of a document -- up to $400 in some crazy HOAs. Can you imagine if someone was trying to buy a single-family house, and the seller tried to charge the buyer $400 for a seller's disclosure? It's part and parcel of the real estate the buyer is considering buying.
Which is why I strongly believe that the seller is the one who should be obtaining this information and providing it to potential buyers upon request. So what if they are "just looking"? Why would you want to start a contract and waste everyone's time (not to mention the seller having the house off the market) if there's something in the CCRs and budget that raises a red flag for the buyer in the first place?
The HOA Board and Condo Management company are obliged to produce an annual budget including operating expenses and reserves. Every owneralso has a copy of the Condo Docs. The HOA Board Treasurer or President (Or Management Company Rep) will also provide a summary of the overall financial condition. Other issues a buyerwill want is a clear picture of the funded reserves, outstanding delinquencies and units under foreclosure.
You say you are lookingat several condos, one in particular. Every 'looker' is not entitled to the records of every Condo, in addition to which it takes time, effort and expense to produce these records. It also offers no benefit to the HOA to simply produce this information for public consumption (any more than an individual would benefit from having their financial statement or budget in the hands of anyone who asks).
If you are serious about buying and want this information before submitting an offer, your best bet is to ask the seller (via Realtor to Realtor or direct) to secure copies of the financials and docs on your behalf. They have the leverage to get these documents and probably already have them, since most HOA's conduct annual meetings where the budget and financial records are provided to owners (Every Owner is required to have a copy of the Docs).
It also offers no benefit to the HOA to simply produce this information for public consumption (any more than an individual would benefit from having their financial statement or budget in the hands of anyone who asks).
In a single-family transaction, the buyer isn't buying into the seller's financial situation. However, if a buyer is buying in an HOA, he IS taking on the liabilities, etc. of that HOA as a part-owner, so to speak, and deserves to see what he is getting into. People don't buy stocks on the stock market without looking at financials (at least, they shouldn't). They shouldn't be buying into HOAs without that information, either.
Quote:
Originally Posted by jghorton
If you are serious about buying and want this information before submitting an offer, your best bet is to ask the seller (via Realtor to Realtor or direct) to secure copies of the financials and docs on your behalf. They have the leverage to get these documents and probably already have them, since most HOA's conduct annual meetings where the budget and financial records are provided to owners (Every Owner is required to have a copy of the Docs).
Agree with you, here. The seller and the listing agent should have this information at their fingertips. However, if I were the buyer's agent, I would specify CURRENT Declaration, CCRs, bylaws, yearly budget and year-to-date balance sheet. (And a copy of the architectural standards, if applicable and not a part of the above.) Owners may have a copy of theby-laws they received when they moved in -- but if they have been long-time residents, it's almost a sure bet that the by-laws have been amended somewhere along the the line.
The management company I work for has the HOA docs and other info we think buyers and agents would want or need on the website under each of our hoas on the public side. CCR, Bylaws, Articles of Incorporation, Rules and Regs, Responsibility Chart (if applicable), and ACC docs and regs.
Upon request we provide basic financials (year to date budget vs actual and balance sheet, no AR details), Reserve Study, and annual meeting minutes. Board meeting minutes are provided depending on what's going on in the HOA, if it's been a contentious few months it's with board approval only. Of course, all of this is provided regularly ro rhe owners through the private side of the website but they never ask them for the info and always come to us.
Our budget breaks down reserve vs operating expenses/income and rhe reserve transfers. This takes me about 60 seconds to save as a pdf and email.
We do charge a $50 property transfer fee at closing, nothing to prospective buyers however which covers out time in answering questions/providing the requested docs, welcome packets, condo questionnaires, et,.
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