Follow Up on When and Who's Responsible to get governing documents to resident

I remember asking this in the past but I am wanting to get something in writing that pertains to either a federal, state or county regulation. (This is for King County, Washington)

During the buying process of our home, we were never furnished any copies of any governing documents for our HOA; several residents have the same issue. This has caused a giant fiasco in enforcing the governing documents as the residents who did not receive them are stating they do not feel they are at fault for not complying with documents they do not have.

I've seen several times on this forum that it is the buyers ultimate responsibility in the end to retrieve the documents (as they are public documents) and they are contractually obligated to be in compliance with the documents at the time of closing. Where is this stated in writing that it is the buyers responsibility?

I appreciate everyone's help with this matter.

Thank you, Carol, for the follow up.

The only codes I have found on our state site pertain to how the HOA is formed and conducts is duties http://apps.leg.wa.gov/rcw/default.aspx?cite=64.38

We have a 3rd party administrator that has not given me a straight yes/no answer or any documentation.

I dug through our closing documents and the only statement to there being an HOA was a line item stating 'HOA transfer fee to (3rd party administrator)'. There is nothing else noting an HOA in our documents.

We did receive a 'Welcome' packet from the 3rd party administrator and it included a 'Welcome' note, a quick breakdown of commonly violations of the CC&R's and an External Alteration Request Form.

As a board member, I'm definitely wanting there to be easier access to our governing documents with future residents. I also want more exposure to the fact we have an HOA.

What is a "3rd party administer"? Does s/he have an office on the premises?

There are legal reasons why CC&R's and Articles of Incorporation documents are PUBLIC records. By-laws are internal documents of the HOA itself but may be filed with the CC&R's making them "Public". Archectual control committer (ACC) documents may be internal as well. There are some HOA's out there that only have ACC's. A few states do make it the responsibility of the seller to provide the documents to the buyer. That usually happens at closing if you don't ask for them before hand. So not enough time to read them in many cases.

The documents are made public for a few reasons. It is the best method of making them available and the buyer informed. As long as they are public and available there can be no reason for you to claim ignorance in the court's eyes. Your HOA is incorporated and when you buy into it, your kind of a "stockholder" in that corporation. Which if you know anything about corporations they must provide their "Prospectus" to any prospective stock holder or member. It's public information. Just have to know what to ask for and where to get it.

Keep in mind you are also NOT a HOA member until you are an owner. Which means you have no rights to certain information prior to purchasing. A HOA may be courteous and give you some information but not required. You are still a person walking down the street in front of their HOA in their eyes. What would you provide that person about your HOA?

Each state is different can be different on who provides the information to you. Overall it is still public information and can not be denied access to it as long as it stays that way. You have a right to be informed whether you know you should be or not.

Chrystal,

Did all of the owners purchase directly from the developer or were these sales of existing homes?

Usually when an existing home is sold through a realtor and the home is financed by a commercial lender, the lender will insist on insuring the title. During the title search, the insurer will find and furnish to you at closing all documents that effect the title, including recorded declarations. In my area, a realtor will also inform you fairly early in the buying process whether the home is in an HOA.

If you purchase directly from a developer who also functions as the lender (or agent for the lender) you may not have much notice other than fine print on the deed that says something to the effect of "subject to the restrictions recorded on page 123, book 5678, records of King County." Unless there is a state law otherwise, that may be all the notice the seller is required to give you.

The short answer is that in the absence of a state law, the seller is normally required to give you notice on your deed that the property is subject to recorded restrictions. The buyer then has the responsibility of finding out what those restrictions may be.

Sorry but there usually is not any paperwork signed stating you are a HOA member now. That is kind of a "Myth" one may put this in. Not to say there isn't any paperwork that says you are buying into a "Restricted/Has restriction" property. However, paperwork with the HOA's name and signing you name on it stating you are a member most likely does not exist. Unless like Mathew said this is part of a developer's sale situation of new homes.

Remember CC&R's are PUBLIC documents and thus looked upon as the buyer's responsibility to be informed. Whether or not you took the time or knew about them is not anyone's responsibility but your own. That is the bottom line here.

Now when I went to buy my house the mortgage company did indeed know it was a HOA. They are the ones that approve the loan and factor in the HOA dues as part of your debt load. The HOA dues are factored in similar to utilities. If your mortgage company doesn't bring the dues to your attention as a debt responsibility, then you should be asking questions. However, does this make them responsible? No. They don't have to live under the HOA rules and just like your realtor, lawyer, or insurance company are not obligated to inform you. Basically the type of loan or if you pay cash for the home is the biggest factor if you even get told. That is because Federal backed typed loans like FHA/ Fannie mae/ Freddie Mac require the HOA to fill out a form with the HOA's "health" on it. That is the extent of the involvement of the HOA in the closing process. A PUD form you never see and is signed by the HOA before your closing that is most likely not in your package. It's between the mortgage company and the HOA.

So there are more factors involved than you may be aware of. That is why paying for a house with straight cash is not always a good idea. There is usually a surprise with a HOA attachment that even pleading ignorance on won't help. So if your looking for someone to blame again it sometimes is yourself... Considering a HOA involved YOU and your neighbors..

Thanks for the wisdom and knowledge input, very helpful. My home was advertised as HOA and how much the fees were. It was easy for me. I received a copy of the CCR's to read before I signed at the closing.

If you paid cash or did not do a federally backed loan is a factor. A foreclosed home would qualify as no knowledge given...HOA does not have to mention it either as you are not a member and it is public. It is a courtesy...

I'm definitely not the person questioning if the CC&Rs and Bylaws are still to be followed even though there was no acknowledgement by the selling agent or the bank. Its definitely something I find odd but obviously I don't have too much trouble with it as I'm the board president.

The trouble really comes down to the residents who are using this as an excuse as to why they are not in compliance with certain portions.

Simply send every resident a postcard with the web address to the documents. If they want hard copies instead, leave a mailing address. Problem solved.

My reply to Chrystal was that CA civil code requires that the SELLER, not the HOA, provide a lot of documents to the buyer, including, but not limited to, the ones that JrO mentions.

But what does WA require???

I do think that it's wise for HOAs to supply new owners with them to help avoid problems down the road. But I also agree that owners cannot claim ignorance as an excuse to not abide by the rules, etc.

Does your HOA have a web site, Chrystal?

Here's a factor to consider when you think the HOA should provide these documents. How about the reproduction or mailing fees associated? Do you think it's free to mail or make copies of these documents? Do you want part of your dues money to go toward making copies, making cd, or mailing these documents? Which if you want your HOA to do this, then you have to weigh in that cost. It can add up to some change over time. Plus if your HOA decides to charge for copies how fair is that to potential buyers or to the seller? How do you justify that charge and how does it show up on your IRS records? A HOA is a non-profit so certain additional charges can effect that.

So if you all agree your HOA can afford to provide copies and any tax ramifications, then go for it. No one is stopping your HOA from providing copies. It's just the perception that it is RESPOSIBLE for this may bite you all in the tail... Hence why the documents do remain in the public domain and in public access.

I simply tell them to go to the courthouse to get a copy. As for the by-laws those are sometimes filed with the CC&R's but not required. The HOA should provide a copy of those if asked. Otherwise the Articles of Incorporation and CC&R's are public.

Now for the whole "I am going to sue" is just crap to me. Please sue... I want you to. It's cheaper for a HOA to countersue and what are your damages? A threat to be sued is just hot air. I get so tired of people saying that "what if they sue" and spending tons of money to prevent it. Honestly, if your duck are in a row, then the it's only up to the court to make you whole. Stop listening to the whole what if they sue scenerios and think logically and one step ahead...

Sorry but got sunburn right now so I can literly say something just burns my "buns" right now.... LOL! It just that whole "I am going to sue" thing gets to me. Okay, then sue and I will wait on the paperwork. Like in this case. Use some logic... I am going to sue because the HOA did not provide me documentation that I am in a HOA... Okay, then bring it on. The HOA response to the court "Judge the documents are considered PUBLIC documents" (Located in the very building your standing in). The court's response will be since the documents are considered public then the HOA has no responsibility to provide them to you. Your case is dismissed and you pay your own court cost. Which if the HOA was smart they would have put in a counter-suit and requested their legal bills be paid or request their legal costs be paid by the person bringing the suit.

So I don't always get the concept of when someone threatens to sue my HOA. It's just a bunch of hot air until the paperwork comes to the door. Not every suit has basis so why hit the panic button? The court makes you whole, so unless you spent money, you ain't getting much back...

Yeah the HOA keeps the documents up to date in the courthouse. It cost money to send copies and stamps. You have a large HOA that can be quite expensive. A stamp may sound cheap but it is not. You have to pay maybe 10 cents a page, someone to mail a copy, envelopes, and time for volunteers to keep up with the requests.

No I will not be sending copies. I got mine from the previous owner. Others have had theirs shared to them. Otherwise your on your own in finding out...

I think you misinterpreted what I said. You said, if the owners want a copy, all they have to do is ask. If a potential buyer asks, why aren't they given the same courtesy? What is typical in your HOA is not in mine. The bylaws and rules are a pertinent part of the HOA and prospective owners have the right to see what they are getting into so they do matter and they matter a lot. My point was to keep a few copies of those documents on hand and a few stamps for that purpose. It could potentially head off problems. How often is it going to come up in your HOA? How many requests or inquiries do you get in a days time that it would financially strap your HOA.

I do like your suggestion in your last paragraph and your suggestion is taking a proactive approach. It's basically saying the same thing I said only using a different method.

RE this posts subject "Who is responsible to get governing documents to resident, I found this information,apparently current as of 2009, published by the Community Associations Institute.

Resale Certificate Requirements by State for Units in Condominiums and Common Interest Communities

States that require resale certificates/disclosures for purchases of condominiums: Twenty-Five states currently impose a resale/disclosure packet for the resale of a condominium unit. This requirement exists in the following states (light and dark gray states):

AL, AK, AZ, CA, CT, DC, FL, IL, ME, MD, MN, MO, NB, NV, NH, NM, NC, PA, RI, TX, VT, VA, WV, WI, WA

States that require resale certificates/disclosures for units in HOAs: Twelve states currently impose a resale certificate requirement for the resale of units within a homeowners association. This requirement exists in the following states (light and dark gray states) :

AK, CA, CT, FL, MD, MN, NV, PA, TX, VT, VA, WV

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Here are the resale certificate/disclosure requirements from the 2008 UCIOA, which is often the “template” used for State Statutes: Bold added, and in part only, the first 10 of the 16 requirements under (a), plus sub-sections (b) and (c):

SECTION 4-109. RESALES OF UNITS.

(a) Except in the case of a sale in which delivery of a public offering statement is required, or unless exempt under Section 4-101

(b), a unit owner shall furnish to a purchaser before the earlier of conveyance or transfer of the right to possession of a unit, a copy of the declaration, other than any plats and plans, the bylaws, the rules or regulations of the association, and a certificate containing:

(1) a statement disclosing the effect on the proposed disposition of any right of first refusal or other restraint on the free alienability of the unit held by the association;

(2) a statement setting forth the amount of the periodic common expense assessment and any unpaid common expense or special assessment currently due and payable from the selling unit owner;

(3) a statement of any other fees payable by the owner of the unit being sold;

(4) a statement of any capital expenditures approved by the association for the current and succeeding fiscal years;

(5) a statement of the amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects;

(6) the most recent regularly prepared balance sheet and income and expense statement, if any, of the association;

(7) the current operating budget of the association;

(8) a statement of any unsatisfied judgments against the association and the status of any pending suits in which the association is a defendant;

(9) a statement describing any insurance coverage provided for the benefit of unit owners;

(10) a statement as to whether the executive board has given or received notice in a record that any existing uses, occupancies, alterations, or improvements in or to the unit or to the limited common elements assigned thereto violate any provision of the declaration;
...
...
...
(b) The association, within 10 days after a request by a unit owner, shall furnish a certificate containing the information necessary to enable the unit owner to comply with this section. A unit owner providing a certificate pursuant to subsection (a) is not liable to the purchaser for any erroneous information provided by the association and included in the certificate.

(c) A purchaser is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. A unit owner is not liable to a purchaser for the failure or delay of the association to provide the certificate in a timely manner, but the purchase contract is voidable by the purchaser until the certificate has been provided and for [five] days thereafter or until conveyance, whichever first occurs.
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And from the 2008 UCIOA Comments

2. While the obligation to provide the information required by this section rests upon each unit owner (since the purchaser is in privity only with that unit owner), the association has an obligation to provide the information to the unit owner within 10 days after a request for such information. Under Section 3-102(a)(12), the association is entitled to charge the unit owner a reasonable fee for the preparation of the certificate. Should the association fail to provide the certificate as required, the unit owner would have a right to action against the association pursuant to Section 4-117.

Thanks so much, Ellie, for providing the list of states and the documents needed. Now, in 2013, there may be additions to the CAI list.

Some posters on this topic worry about the expense to the HOA, but as your citation shows:

"2. While the obligation to provide the information required by this section rests upon each unit owner (since the purchaser is in privity only with that unit owner), the association has an obligation to provide the information to the unit owner within 10 days after a request for such information. Under Section 3-102(a)(12), the association is entitled to charge the unit owner a reasonable fee for the preparation of the certificate. Should the association fail to provide the certificate as required, the unit owner would have a right to action against the association pursuant to Section 4-117."

I certainly am not one who worries about lawsuits by owners who unwittingly break the rules and are fined. I simply think that providing the documents before closing or ASAP helps avoid violations in the first place!! Owners who aren't HOA savvy or in our case, HOA & high rise savvy, can make mistakes that could harm others or the premises. I think it's best to make it easy to comply.

Most HOAs nowadays do have or should have websites to which realtors and sellers can be directed.

Sounds like you're on the right track Chrystal!