HOA Background check detail

Hello,

I'm considering moving into a new area that has a HOA. I'd like to do a personal background check on myself to see if a completed non violent offence that originated in 2005 and was completed in 2009 shows up on my record. How granular are the background checks that HOA's use? For instance I can elect to search 5 different county records that I've lived in, sexual offender registry and social verification.

Can anyone point me to a resource that they may feel is good enough for me to test the waters with. I let someone help me get into minor trouble and I'm just wondering how this might impact me.

Thanks!

Carl,

Are you looking at a particular HOA that you know requires background checks? Are you looking to rent or buy? Like Tim, my association doesn't do checks, but from what I have read, it is more common for renters than buyers. If this is more of a general question, I would suggest looking at associations that don't pry into their residents lives.

We do not and have never done background checks on new residents or homeowners. Good luck!

Our background checks are only for renters and only include certain classes of felonies. With that being said, I agree with Allison. We have owners who are drug addicts, wife beaters, sex offenders, etc. There is nothing in our documents that prevents buyers from purchasing property nor is it within anyone's control to prevent owners from committing crimes.

There are plenty of communities in Florida that do not require background checks on purchasers. If you are truly concerned about your background check, perhaps you might seek a nice home in a less stringent community.

States are different and HOAs are different. My gated community HOA doesn't do background checks. Renters are another story, but I think HOAs typically, at least in Florida, have no legal right to approve or deny the sale of a fee-simple title residence to anyone. Condo boards do it routinely and, by law, may deny prospective purchasers. HOAs, not so much. In Florida I think if an HOA wants to reject a potential buyer then that HOA has to buy the property itself from the seller for the price that was negotiated with the buyer they wish to deny. Otherwise it's interference with the freedom of a seller to sell to whoever he feels like selling to. The HOA has no legal leg to stand on to get in the middle of that private transaction to which they are not a party. Your mileage may vary.

Most HOAs are not informed until after a property has been purchased (single family HOA, not sure how it works for condos or townhomes) - information is received from the title company regarding the change in title - the HOA has no say over who buys into the community - it's a done deal by the time the HOA is informed.

In Florida that doesn't seem to be the case. We always get an estoppel request from the closing agent asking about dues status and pending special assessments. They usually have a place on the form where it asks if any "association approval is required". We just say "no", but I assume this is where associations who did some kind of check would start that process.

OK, I did a little more searching and found some conflicting information, at least as pertains to Florida. I found this HOA page that says their estoppel letters state "Whether the association needs to approve a new owner," and a legal blog here where a Florida lawyer, in the comments section, says, "The Association cannot prevent you from closing on property".

So I don't know anymore. I would tend to think that the lawyer's opinion carries more weight, but he's not my lawyer and I would engage legal counsel if I really needed advice on the matter.

We have a formal procedure for approving purchases, although there is no background check required. They go through our property management company to get this done. It allows us to know that there is a sale pending, get the new owner information including children, pets and cars and other info like email address and phone number. We have them sign an affidavit saying they have read the governing documents and understand and agree to abide by the rules; they agree to pay the dues quarterly etc. Its a formality but important because it formalizes our relationship with them as the BOD and if they didn't know they were moving into an HOA before, they know now and have signed the affidavit that they will abide by the rules. At the HOA down the road where they have the wierd rules, they can and have prevented folks from moving in. So long as its in their documents, they apparently can deny a purchase.

Forget about the HOA approving the new owner. Where are you going to find a buyer who is willing to accept such a restriction on who she can sell it to?

I have never seen such a restriction except in the case of cooperatives - which are an entirely different animal than HOAs and Condos.

I wont speak for any other state but in Florida, the deed will contain the information that shows the property is part of an HOA. It is a PUD-Planned Unit Development, and this info is part of the deed. Some are deed restricted communities without the PUD. Caveat Emptor, if you buy the property you are a member of the association.

"People Zoning" rather than "Property Use Regulation":

Larry B13 commented with which I agree :

"I am curious as to where associations, both HOA's and condos, derive any authority to prevent anyone from purchasing real estate ? Even if there was a provision in the declaration to give the association the authority to approve or disapprove purchases, would it be lawful ? . . . Unless the HOA wishes to purchase my property from me, it just looks like the whole approval-of-buyers thing is unworkable. What am I missing ?"

NPS Penn commented (with which I agree) :

" Forget about the HOA approving the new owner. Where are you going to find a buyer who is willing to accept such a restriction on who she can sell it to ?"

The very fact that CarlT2 (Florida) has brought the concern forward is a good indication how it works and THAT it can work to deter buyers with some sort of 'bagage'. It pre-empts potential buyers (and professionals setting up such sales ).

A number of states seem to allow landlords to disqualify based on criminal records whether or not pardoned, so it is a short step to believing that HOAs & condos may claim such veto over purchasers. Unless trying to make some civil rights/ equal protection statement, as NPS notes how many would knowingly step into bigtime hostility ?

Unless a state legislates a HOA/condo veto power to block purchasers with criminal records, one would then have to look at the CCRs themselves. Could CCRs - property use restrictions - zone an entire class of persons out and by what rationale ? Could "no criminal records buyers" run with title ?

Both questions got ONE set of indirect answers in my jurisdiction years ago when a vendor and a purchaser sought a judicial declaration striking down a WHITE GENTILES ownership restriction. The Beach O' Pines Owners Protective Association successfully fought the proposed sale all the way into the Supreme Court, where the White Gentiles ownership restriction was finally killed. It was killed on a narrow technicality only : that people-zoning is beyond restrictive covenants / CCRs on title. That purely people-zoning is really not a title-running scenario. ( so the HOA indirectly helped trigger human rights legislation )

One analytic tool later applied to this approach is "The Any Other Owners Test" : would a different set of objecting HOA neighbours - eg non-bigots ? - care about a purchaser's tan or religion ? If maybe not, then the restriction must be PEOPLE ZONING instead of legitimate land use regulation capable of running with title. ( postscript : The challenger quickly completed the sale and resold . . . ).

( The above is merely one approach to the validity of CCRs claimed to prohibit purchasers with criminal records)

Spot on with the "slow as molasses" comparison. There's also something in Florida law about refunding the fee for the estoppel letter if the sale falls through. I think it puts the responsibility for the refund on the seller even though it was the HOA that collected the fee for issuance of the letter in the first place.

There is recent activity in the state legislature regarding an "estoppel bill" that may pass this year.

http://www.floridacondohoalawblog.com/2015/03/articles/call-alert/estoppel-bills-dealt-severe-blow-in-florida-legislature/

http://www.floridahoalawyerblog.com/2015/03/new-florida-bill-presents-seri.html

Lawyers and property management companies are against it because it limits the amount that may be charged to $150 (as opposed to "reasonable") and speeds up the time frame in which a letter must be prepared after the request is made. I don't think it's a big deal, personally, and can't understand why some are so upset over it. The FL legislature threw a hissy fit last month and bailed out on their session. They are scheduled to resume their "work" in a special session later this month, so it may yet get passed this year.

In PA, we have the equivalent of an estoppel letter (called a 3407 for condos and a 5407 for HOAs which are the statute numbers). Requirement is more extensive. We provide 100+ pages of info (that no one actually reads). Includes cc&rs, bylaws, rules, budgets, reserves, 3 years of projected reserve expenditures, amounts owed, out-of-compliance matters, etc.

Like FL, it's optional and provided at request of seller. Even so, it's common practice - I have yet to see a sale that doesn't include one.

How it works here - HOA must provide letter within 10 days of request from HO. Buyer can cancel the sale and get full refund of deposit money within 5 days of receipt for any reason whatsoever. It could be something as little as a weight limit on pets or number of pets. Buyer doesn't even have to give a reason.

Letter must identify non-compliance issues. If not in the letter, then after the sale, the buyer does not have to comply. Since the letter is primarily for protection of buyer, no buyer's RE agent here would ever think of going forward without estoppel letter.