A recent issue came up with HOA documents that had expired and changed without the agent’s knowledge during a delayed close of escrow.
Specifically a new pro forma budget with an increase in dues had been generated since the original package had been ordered and delivered to the buyer. Fortunately the increase was small but it brought to mind how challenging it can be to track HOA updates and changes with the governing body.
Creating a system that would remind us to check the HOA docs for any impending expirations/additions/changes (like the insurance certification, budget, financials, HOA certification and new newsletters and annual meetings) proved impossible as we needed to know when meetings take place, if there was a change to the meeting date, if the budget and other documents came out early or late, etc.
Many HOA’s using online services make it difficult to check for updates and may even charge additional fees.
Finally, a delayed closing make it difficult to create a timeline check for possible changes to the documents along the way. You know how delays go-suddenly docs are in title and we are closing the next day!
Our California purchase contracts do not specify how current HOA docs should be (other than the most recent 12 months of minutes). Furthermore, the CAR HOA forms 2 and 3 (which provide a list of documents for the HOA to check) specify that Brokers have not and will not review the documents for completion.
Some agents are now including a statement on their Receipt for Documents cover page:
Buyer(s) is/are aware that Homeowner's Association documents associated with this transaction may expire, be updated or changed by the HOA without agent or seller knowledge. It is the buyer’s responsibility to confirm all information is up-to-date.
Another helpful tip is to remind your seller to forward any correspondence from the HOA to you.