CC&Rs and Info requested by delinquent owner selling

I am not sure who is selling the unit; the delinquent owner? the bank? someone else that holds the paper? But the realtor trying to sell the unit is asking for info to sell the place, including the CC&Rs and the typical stuff like meeting minutes requested by the buyer.

The owner hasn't paid dues for the last 8 months and has a debt to the collection company that I think the HOA is going to have to pay if the owner doesn't, which appears to be the case.

The realtor is asking for the information from the property manager, who is also our corporate agent (not sure if that is the right term here in California). Our property manager has said that she will provide the seller with the documents if they pay for them, which she has done with past sales so I assume that is legal, AND she is also saying that she won't release them until they pay their delinquent dues.

An interesting idea if it is legal. Is it?

Tino

The CC&R's are PUBLIC records. They should be recorded in the County's Records Department. The Realtor should know this but many don't. They can request to discuss the meeting notes/HOA with a Board member/President. However, keep in mind a BUYER is NOT a MEMBER of the HOA. So the HOA can choose NOT to release certain information that pertains to the HOA.

It is considered the BUYER's Responsibility to be informed about the HOA. It's is NOT the HOA's, Realtor, Attorney, or even the bank. The seller should have a copy of the rules to hand over at closing but not always required.

This is one of the biggest benefits of having a community website and posting the docs online. When I had narrowed down my house-hunting to 3 places, I was able to read the documents online before making offers and wasting time of the sellers, two agents, and myself. I was specifically given 5 days during the negotiation process to read and review the HOA docs.

Keeping the documents out of the hands of a potential buyer might just mean you are going to end up with a new owner who has no idea what's expected of them.

I understand the logic that the sooner the place is sold the sooner we will again start to receive our $345 a month dues. But the owner owes us a few thousand dollars of unpaid dues, plus we have $850 of collection fee services that the collection company wants to charge us because they were not able to collect those dues from the home owner.

It is unclear to the board and the prop manager whether the home has been foreclosed by a court hearing or whether the home is being sold as a short sale. We figure there is no way to collect those delinquent funds from the home owner.

I could imagine there being a law that states the home owner should be able to get access to records from the HOA. And that the price should be reasonable and not punitive, but I could also see why there should be a case for making them pay up before they get to exercise their right to get the records. or maybe the law doesn't work that way.

It's an interesting situation. There are a few issues here that need to be discussed separately, and I'm speaking strictly for California.

First, on the release of information to a Realtor:

Technically, it depends on the information, but it's the seller's (homeowner's) responsibility to request any records that will facilitate the sale. The homeowner may be a bank, or may be an individual or partnership, but as has been said, somebody owns the property. Realtors do not represent the buyers of a property, by the way. It may seem as though an agent working with potential buyers is representing the buyers, but not so - both the buyers' and seller's agents represent the seller. However, the listing agent is the primary on any negotiations, and the listing agent is responsible for brokering the deal. That means working directly with the seller to secure any documents and disclosures required to help the buyers close the transaction.

Once a buyer enters into escrow with the seller, he can request documents from the seller. Sellers have a duty to disclose relevant information to buyers and can request records from the association as provided for by statute. Details here.

On collection agencies:

If your collection agency is charging your HOA if they are unable to collect from the homeowner, you need to fire the collection agency. Agencies that specialize in working with HOAs make a lot of money over time, and the good ones do not charge the HOA a penny if they fail to collect. Our collection agency, for example, is one of the good ones. It pays to shop around.

On sales - short or otherwise:

It is not in your HOA's best interests to hold information for ransom, even if it were legal, which is doubtful at best. If the unit is sold, all liens get paid - even in a short sale. That means your HOA will get your money back, even if the seller loses money on the deal.

Rob

Melissa,

That statement will depend a lot on State laws. In VA, the HOA is required to provide the latest reserve study, the latest financial report and the last 6 months of meeting minutes. It appears that a few other States are adopting similar laws.

Here is a link to Virginia's Disclosure Requirements § 55-509.5

Here is Florida Law for Buyers. Buyers have the right to cancel contracts if this information is not available to them.

720.401 Prospective purchasers subject to association membership requirement; disclosure required; covenants; assessments; contract cancellation.—(1)(a) A prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale. The disclosure summary must be in a form substantially similar to the following form:
DISCLOSURE SUMMARY
FOR
(NAME OF COMMUNITY)

1. AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS’ ASSOCIATION.

2. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY.

3. YOU WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $____ PER ____. YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $____ PER ____.

4. YOU MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE.

5. YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS’ ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY.

6. THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS’ ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $____ PER ____.

7. THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS.

8. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY.

9. THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

DATE: PURCHASER:

PURCHASER:

The disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the disclosure summary required by this section.

(b) Each contract entered into for the sale of property governed by covenants subject to disclosure required by this section must contain in conspicuous type a clause that states:
IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR SELLER’S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER’S INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT. BUYER’S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

(c) If the disclosure summary is not provided to a prospective purchaser before the purchaser executes a contract for the sale of property governed by covenants that are subject to disclosure pursuant to this section, the purchaser may void the contract by delivering to the seller or the seller’s agent or representative written notice canceling the contract within 3 days after receipt of the disclosure summary or prior to closing, whichever occurs first. This right may not be waived by the purchaser but terminates at closing.
(2) This section does not apply to any association regulated under chapter 718, chapter 719, chapter 721, or chapter 723; and also does not apply if disclosure regarding the association is otherwise made in connection with the requirements of chapter 718, chapter 719, chapter 721, or chapter 723.