As homeowner associations (HOA) become more and more common in our society it is important that we know all the ins an outs of the community rules and regulations. Otherwise it can bite you in the butt and cost you money or lost time.
I will give an example of this below.
Be Aware of HOA Rules and Regs
In my area a large majority of homes are within homeowner associations. I’ve talked about HOAs before and even did a chapter in my book on them.
They have their pros and cons and in order to get the most out of them and avoid issues it is vital that you understand the rules and regulations that govern them.
Ever hear the joke about “read the fine print?”
There isn’t exactly “fine print” per se, but you need to understand the verbiage of the documents so you do not get caught up in a situation like the one I experienced while selling a condo recently.
Just about all HOA’s require the buyers or renters of a property to conduct an interview with one of the board members. Now the type of interview is up to the board based on the information listed in the rules and regs.
Many will do a phone call, video chat or in person. Some are particular about physically meeting the person to interview them.
This is something you should be clear on.
Apparently, I was not clear on it in this particular situation. In the rules documentation it says a “personal interview” needs to be done. That did not concretely mean “in-person” to me.
I have buyers that are snow-birds up north for the summer. An in person interview is clearly not going to occur.
Now, the word “personal” can certainly be debated, but by the time I bring my lawyer in to debate this item I can just find and close with a new buyer. However, time has still been wasted and I essentially have an idle property for an additional three weeks, which means money out of my pocket each day.
Nearly all HOAs use a property management company. You also need to be clear and direct on what the application process is with them as miscommunication and bad information will occur more than you’d expect.
This happening in my example. The property management let my buyers believe they could do a phone interview, while this was never the case. They simply did not communicate that an in-person interview was required by the HOA board.
This item alone could have saved me at least three weeks time.
Exceptions – Maybe?
I did file a letter with the board asking for an exception for my buyers as they have past all background checks and are good to go outside of the board interviewing them and signing off on the purchase.
The decision is still pending…its examples like these why I know some investors that do not invest in HOA communities.
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