These damned HOA questionnaires

If memory serves me right you went out of your way to become President. Did you assume all title, do as you wish etc? Were I a seller and you were holding it up as your doing, we might just see each other in court.

Ron,

We did some research, got hold of various questionnaires from various lenders and then put together an Association's PUD (planned unit development) Statement. This statement answered the questions that HUD required and we simply told them that this statement is provided free of charge. If the lender wants the same answers provided on their forms, then we charge $25.

Once we started doing that, we only ever had one lender ask for their form to be completed.

We update the number of rentals/owner occupied every 6 months.

Lesson I learned many years ago is only answer the question(s) asked.

I like Tim’s suggestion – I’ll bring that to my HOA board.

For what it’s worth, I suspect the banks are starting to ask about CCRs and local zoning laws to see if they’re fairly current with local, state and federal law. There have been so many disputes and assorted lawsuits over what the CCRs say and don’t say (with some downright illegal provisions) that the bank fears someone may file a lawsuit over something someday...the HOA loses big and has to pay lots of money...which the homeowners have to fund with a special assessment...and then some homeowners (like the one applying for the loan!) get squeezed...don’t pay the special assessment or refuse to...the HOA sues THEM...more money is spent on lawsuits...mortgages don't get paid because the attorney has to get paid first...and then the bank forecloses. And so on.

That said, I agree with you – the banks have staff that can read the CCRs for themselves and contact the property manager with questions (why should the HOA do their job?)

On the other hand - if more banks are starting to do this, this may be a good time for all HOAs to take a look at their documents to see what needs to be updated. Yes, it's time consuming and expensive, but these days HOAs have to do what they can to increase the chance of a home being sold (not to mention protect their own pocketbooks from lawsuits). If spending, say, $2000, can protect the HOA from a $5000 judgment or higher down the road, it may be worth doing.

WOW, you're serious??

yes, dead on serious

to clarify: the courtesy info will be supplied to the attorneys and/or realtors

the seller (member of the association) gets any corporate info they request

THEN

CAVEAT EMPTOR

John

Investors care about getting paid. The chances of a owner defaulting on a loan increases when the property is considered "Non-Owner Occupied".

THAT IS A FACT!

Your wasting your time. And doing the bank's job, for free. Time you could have spent on other things or friends and family.

I'm sorry John. Allow me to rephrase.

Since our PUD statement identifies, to the best of the Associations knowledge, the number of lots that are owner-occupied and the number of lots that are rented, along with the number of lots owned by single entities, I should have simply said that we update our PUD statement every 6 months.

respond to the request with a form letter/email essentially saying: contact the seller

when the seller 'screams' send the seller the requisite corporate

statement of account
letter (if any) of assessment
owner occupied %

let the SELLER fill out the form and then 'countersign' if needed

ps. the buyer is free to use legal tender (from whatever source they choose)

John,

This has been discussed in an earlier thread titled Subject: Who's a renter?. That thread, in my opinion, showed that Associations account for the number of owner-occupied units differently. That thread, in my opinion, showed that there is no real way any Association is going to have an exact figure, simply because most Associations are not involved in the rental process. I had identified how our Association does there accounting in that thread.

In this thread, I simply provided the way we responded to such requests. It's not perfect, but it's what our Board has agreed to and it appears to satisfy the membership and the lenders. Others may have different ways to respond that work for them. Perhaps it's providing a standard statement like we do. Perhaps they respond to each request individually. Perhaps they have hired someone to respond for them. Perhaps they simply ignore the requests. Perhaps they tell the seller that this is their problem. Perhaps there are applicable statutes requiring the Association to respond or perhaps there are no statutes to guide what the proper response would be.

This forum is to share ideas. I have shared what we do. If others want to incorporate the same idea into what they do, great. If they want to incorporate somonelses' idea, great. If they want to come up with their own way of responding, great. perhaps they will share what they came up with so others can decide if they want to use it.

BTW - In reviewing the thread referenced above, I have noticed that you, JohnB, have not identified how your Association identifies owner-occupied units. You have certainly offered advice on how others are doing their accounting is incorrect (and I believe that most agree that they are not accurate). You also have certainly offered ideas on how to respond to those questions without giving an actual number (see other thread). However, you have not identified how your Association actually responds to those requests. Would you care to share?

Tim

If the banks wanted to know how often each owner has sex would you poll and investigate it for them? The same basic idea applies.

What people do with property they own is none of my business and if someone requires to know this info, they can investigate it themselves.

(we have 126 fee simple stand alone homes)

We don't specifically. Neither care nor check.

The purchaser's financing is the purchaser's problem.

We do not WANT a purchaser coming in on an insured low down payment shoestring.
That is the person one does not want to move in - worse than any renter.
We want any purchaser to have the 20% down for a conventional mtge.

We have an ACCURATE members list with mailing addresses obtained/checked annually from the county assessor's web site.

We assume that the property tax bill is the mailing 'address of record'.

We don't care who actually resides in a 'unit' as long as there is 1 resident/occupant over 55 ~ occupant as defined by HUD. (resident need not be owner)

Most of us are veterans who actually fought to preserve our freedoms. (at least that is the reason we thought we were fighting)

Our covenants were amended in 2006 banning leases. Period.

We have found that enforcement of this ban to be impossible except in one blatant commercial enterprise which required a license. If y'all try to enforce a rental ban, y'all WILL lose if challenged by a competent attorney.

The problem is it is almost impossible to define 'rental'.

Property transfers to the kids with a lease-back arrangement ?
Cousins who move in and 'help with expenses' while owners are away 1/2 the year ?
A friend who moves in with you and 'splits expenses' ?
A contract sale which never closes ?
An LLC owner that transfers a 1% ownership in exchange for a monthly service fee ?
Family use during the year with weekly expenses shared with only 1 owner ?
etc.

We vigorously enforce the one 55+ occupant (as per HUD definition) per unit covenant.

The MAIN purpose of the HOA is to:
MAINTAIN THE ENGINEERED STORM WATER FACILITY + THE PRIVATE ROAD

not

act as the rental police

(the pool, clubhouse, RV storage area, entrance gate and sign, are nice but expendable)

As per HUD regulation we accept a signed self certification.

We also accept any other document which shows DOB.

(we actually study the rules and regs)

AGREED!
Why should the HOA provide anything that is public info?

"What is the status of their account?" is pretty much the only valid question I can see that should involve the HOA.

CC&Rs, Bylaws, Rules, etc...? Available publicly or from the seller.