The Association Nightmare


As a former Lender, one of the biggest nightmares a home buyer can experience is dealing with associations. Most are managed by third party management firms and can create headaches beyond what you would expect such a minor entity would be capable of. Literally, many turn into “mini” dictatorships with home owners and buyers at the mercy of Bi-laws and/or management policies with no purpose other than to make your life miserable.

To find out what neighbors really think, before you contract, you need to spend an evening talking with current residence to determine what they think of the HOA. Don’t just take your Realtors® word for it. You need to ask questions and don’t be afraid to ask if knowing what they know today about the association, would they still buy their home. This is so important to your future happiness with your home, as you’ll be “Living” with this “Big Brother” for as long as you own your home.

Unfortunately, many HOA’s prevent low to moderate income families from affording the home of their dreams. HOA dues, the fees paid for meeting the responsibilities established within the Bi-laws of the association, are calculated as a part of a home buyers housing ratio. This added cost can be the difference between qualifying for a middle class home or being relegated to lower income housing markets. Be sure, as a home buyer, you calculate these fees into your payment.

In a transaction where a HOA is present, there will be one to several documents the association must complete, and in some instances, they will be required to provide a copy of the Bi-laws. In almost all instances there will be a fee or many fees, charged for the completion of these documents and any copies which must be made. These fees are almost always required to be paid up front and may require up to 30 days to get completed by the HOA.

Be sure your Lender/Broker/Banker, the seller and both Real Estate Professionals understand this as the seller may be required to participate in the process to get these forms. In addition, contact the HOA directly to find out what precisely they need as you may have to complete an application and qualify as a resident before you are allowed to purchase a home within that community. Finally, in addition to your requirements as the buyer, the seller may be required to complete documentation before selling the home.

You simply don’t know what little surprises a HOA Dictatorship can throw at you, so as a home buyer, you most certainly want to be involved in this. Most home owners never bother to read the fine print of the Bi-laws for the community whether they are the originals or amended Bi-laws.

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