Who Pays for the HOA Resale Package?

When a property within a homeowners’ association (HOA) is involved in a real estate transaction, an HOA resale package becomes an important document. This package provides potential buyers with a comprehensive overview of the community they are considering joining. Understanding this package is a necessary step for both sellers and buyers in navigating an HOA-governed property sale. Its contents help ensure transparency and a smooth transition of ownership within the association.

Understanding the HOA Resale Package

An HOA resale package is a collection of documents that provides important details about a property and its associated homeowners’ association. Its purpose is to inform a prospective buyer about the financial health, governance, and rules of the community. This transparency helps protect the buyer by disclosing potential obligations and allows them to make an informed decision before committing to a purchase. Similarly, it protects the seller by ensuring full disclosure and minimizes financial risk for the HOA by clarifying outstanding obligations.

The package comprises two main components: a resale certificate and the association’s governing documents. The resale certificate offers a financial snapshot of the specific property being sold. It details any outstanding dues, pending or unpaid violations, and special assessments, along with fees due at closing. This certificate also provides information about the HOA itself, such as pending litigation, planned capital expenditures, and the amount held in reserve funds.

The second part consists of the HOA’s governing documents, which outline the operational framework and rules for the entire community. These include the Covenants, Conditions, and Restrictions (CC&Rs), bylaws, and articles of incorporation. Other documents commonly found are the current budget, financial statements, reserve study, meeting minutes, and insurance information. These documents allow buyers to understand their future responsibilities, the community’s financial stability, and the rules they must abide by as members.

Determining Payment Responsibility

The question of who pays for the HOA resale package is a common point of discussion in real estate transactions. There is no single universal answer, as responsibility often varies based on several influencing factors. While the seller is frequently responsible for this expense, practices can differ significantly depending on location and specific contractual agreements.

State and local laws play a significant role in determining payment responsibility. Some jurisdictions have specific statutes or ordinances that mandate which party, typically the seller, is responsible for providing and paying for the resale package. However, these laws are not uniform across the United States, meaning that what is standard practice in one state may differ in another.

Beyond legal mandates, the terms negotiated and agreed upon in the real estate purchase agreement hold substantial weight. Parties involved in the transaction have the opportunity to negotiate this expense, potentially making it a part of the overall concessions or credits at closing. This negotiation power can also be influenced by market conditions, such as whether it is a buyer’s or seller’s market.

Local custom also influences payment responsibility, even in the absence of explicit legal requirements. Ultimately, while a seller often pays as part of their disclosure obligations, the final determination is subject to applicable state laws and the specific terms outlined in the purchase contract.

Obtaining the Package and Associated Costs

The process of obtaining an HOA resale package involves specific steps and incurs various fees. These costs are set by the homeowners’ association or its management company, reflecting the administrative effort required to compile the necessary documents. The fees are non-negotiable by the buyer or seller, though responsibility for payment can be assigned through negotiation.

Standard fees for an HOA resale package range from approximately $175 to $375, depending on the community and state regulations. Some states may impose caps on these charges to prevent excessive fees. In addition to the base cost, expedited or “rush” fees are common for situations requiring quicker delivery. These rush fees can add an extra $50 to $200 or more to the total. Other potential charges might include transfer fees, processing fees, or fees for specific items like common area keys, which are typically disclosed within the package.

Requesting the package falls to the seller, their real estate agent, or the title company handling the transaction. The request is directed to the HOA’s management company, or directly to the HOA board if it is self-managed. Many management companies utilize online portals or dedicated services to streamline the ordering process. To facilitate the request, specific information such as the buyer’s and seller’s names, the property address, and the anticipated closing date is required.

Once requested, HOAs have a specified timeframe to provide the complete package. This timeframe varies by state but commonly ranges from 5 to 15 business days for standard delivery. Some states may have stricter legal limits, such as 10 business days. If an expedited delivery is needed, the aforementioned rush fees apply, and the package might be available within 1 to 3 business days. Ordering the package early in the transaction process can help prevent delays, as timely review by the buyer is often a condition of the sale.