BEFORE YOU BUY...DO YOUR "DUE DILIGENCE"

Q.  I am getting ready to retire and I am considering buying a condominium unit and have looked at several older complexes and some that are brand new. Are there any tips you can give me on what to look at before I make a decision?

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Who is responsible to pay special assessment?

 

Question:


I have a contract on my Virginia condo to close next week.  After the contract was signed, a special assessment was voted on and passed. The first due date for the assessment is after the closing.

The contract says "Unless otherwise agreed to in writing, Seller will pay any special assessments and will comply with all orders or notices of violations of any county or local authority, condominium unit owners' association, homeowners' or property owners' association or actions in any court on account thereof, against or affecting the Property on the Settlement Date."

The title agency is saying that because the special assessment was passed before the closing I must pay the whole assessment.  Is this the correct interpretation of the above language from the contract?   I will pay it if I have to, but as it is not even due until after the settlement date; I would like to confirm.

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Resale Packets

 

RESALE DISCLOSURE – SOMETIMES NOT ALL IT SHOULD BE

 

One topic that seems to always provide interesting fact situations requiring a fair amount of analysis is resale certificates. One reason is that the Legislature keeps messing with the law. There is an amendment of some type virtually every year and 2008 was a banner year for amendments to these provisions. I suspect that many folks who need to know and are subject to the new statutes enacted last year are still not aware of all their requirements and nuances.

 

We had the following question posed to us on our website (some editing was done):

 

“Hello.  I purchased a house in an HOA community in Virginia on January 9, 2009. 

The SELLING Real Estate Agent ORDERED a Resale Package from the Association.

Three months after settling into our new home, we were surprised to see $225.00 added to our Home Owners Association Dues Bill.

I called the number on the bill and was told that the SELLING Real Estate Agent ORDERED the resale package and then did not pay for it, so they were charging ME.

This is something I DID NOT order, nor did I receive, so I told them I would not pay it.

I paid my normal dues.  To my surprise, they applied part of my dues to the $225.00 and are now claiming that I am not paying my dues on time and they are charging me $25 late fees per month.

Recently I received a letter via certified mail from the manager: Notice of Intent to Accelerate Installments and File Lien.

The letter lists the association's attorney with a phone number.

I bought this house, which was a foreclosure, and got a great price, but I feel that this has marked me because the Association regularly charges $200K more for houses here then I paid.  I feel I am being retaliated against because I got a great deal on a house. Could you please help?”

So what we have here, judging solely by the facts presented by the writer, is the request for a packet by a real estate agent, compliance with that request by the Association and a subsequent failure to deliver the packet to the buyer, which is in fact now the responsibility of the Association. 

 

We must now wonder whether the Association provided as required by Section 55-509.6 C of the POA Act and Section 55-79.97:1(C) of the Condominium Act a schedule of fees to the person who requested the packet at the time of the request. Perhaps such a schedule could also have instructions on payment and notification of the settlement agent with regard to collection of the fee.   In this case it is possible that the settlement agent was neither advised of the resale packet nor the requirement to collect a fee. There is no mechanism of which we are aware by which the settlement agent can learn about the requirement for collection if the agent is not informed by the person who obtained the packet. In this case, it would seem the real estate agent should have informed the settlement agent of the need to collect the Association’s fee. In this case the buyer would not have known to look on the settlement statement to ensure that the fee was paid (such an awareness would be uncommon to say the least) because he never received the packet. One would think that in most cases the packet is received and that the buyer’s agent is aware of the packet and could then ensure that the settlement statement reflects collection of the fee for the packet from the seller.

 

As most of you probably know the amendments of 2008 upset the prior course of dealing whereby payment for the packet was required at the time it was obtained from the Association or the management agent; now payment is to be obtained at settlement or by collection from the lot owner if payment is not received by the association within 90 days of the issuance of the packet.

 

So what is the homeowner who has received a bill from the Association for the packet supposed to do? The issues we see are as follows:

 

1.      Did the Association do all that it was supposed to do to comply with the statute and, therefore; have the right under the statute to place a lien on the lot then seek to collect it?

2.      If so, does a homeowner who did not receive the packet have to pay the association to get the lien removed?

3.      If the Association failed to adhere to its obligations strictly under the statute, is it precluded from collecting on the lien?

4.      What action can the homeowner take to have the lien removed?

5.      If the lien is not permitted, how can the association obtain payment? Who are the possible responsible parties?

 

This fact situation illustrates that the new law passed in 2008 has some flaws which need to be monitored. We solicit your input on any experiences you have had with resale packets which you think may help determine the effectiveness and suitability of this new law. 

 

This situation also illustrates another unfortunate fact: some home buyers do not appreciate the need for obtaining and reading the disclosure packet. This buyer expresses no interest in obtaining the documents….only to avoid payment,  of course, the seller should have paid for the packet. We believe that resale disclosure is critical to successful living in a community association – without it buyers are at risk of moving into a new home with rules and covenants under which they do not wish to live. This will benefit no one.

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Early Disclosure

Q:Many homeowners seem to be unaware of the law requiring them to provide disclosure documents to their buyer. Sometimes, it is only a few days before closing when buyers request the resale certificate. As association secretary, I have to get the documents prepared. What can be done to correct this? Whose responsibility is it to comply with the law?

A:For many years the Condominium Act and the Virginia Property Owners Association Act have required disclosure of association information. Several people are responsible for compliance with that law. These are the real estate agents, attorneys and the seller.

A community association has fourteen (14) days to provide a disclosure packet from the time the request is received with a check. Therefore, a seller or his agent must ask the association for the packet as soon as the contract is signed. After receiving the information on dues, rules, the budget and other matters, the buyer must quickly decide whether to cancel the contract based on information contained in the packet. When the packet is requested at the last minute, there is no real opportunity to review the information, so the purpose of disclosure is defeated and both the buyer and seller are put at a great disadvantage. As a result of such delay the buyer is often committed to going through with the deal, even if he or she is unhappy with the contents and facts revealed therein. In essence, the buyer may be forced to give up certain rights because the professionals involved in the sale failed to perform their tasks in a timely manner. In 2002, the Virginia General Assembly passed a new law allowing associations to charge a rush fee not exceeding $25.00 for furnishing the packet within three days or less from the receipt of the request. If special mailing is requested and you wish to accommodate, you may also charge the actual cost you incur to do so.

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