What to know before closing on a homeowner’s association home

On Behalf of | Jul 10, 2020 | Residential Real Estate Closings

Homeowner’s associations (HOAs) have become a significant part of communities and neighborhoods in Georgia and across the U.S. in the last 20 years. You’re probably aware that you’re subject to certain restrictions once you move into such a community as this. What you may not know, though, is that you may have to consult with your HOA board before you can list or finalize the sale of your home.

You may need to consult with your HOA before selling your home to resolve past due balances or upcoming costs. The association’s bylaws may state that you have to follow specific procedures, such as transferring information for future HOA dues before closing on your home sale. The bylaws may also require you to perform a home inspection before you can finalize the purchase of it at the closing.

HOA bylaws may require you to transfer the “homeowner resale package” before or during the closing. Documents such as all the bylaws or rules, covenants and restrictions form part of this packet. Buyers generally have three days to review these documents and rescind the sales contract.

The HOA may charge you a fee to transfer these documents into the new homeowner’s name. The transfer fee can be as high as $275 in some jurisdictions. Some HOAs assess a transfer fee that equates to a percentage of the home’s sales price. Standard rates generally fall between .5 to 1% in such instances. HOAs may charge both a percentage of the sale and a flat fee in some cases.

Unless you’ve thoroughly read your HOAs bylaws, then you might have thought that you were entitled to sell your home as you pleased. You may have also been under the impression that once you’d found a buyer, the only thing that could stop the closing from moving forward is if the financing fell through. Closings may not happen if the Augusta HOA doesn’t consent to the sale or if the buyer doesn’t like what the bylaws say, though.

Your attorney can advise you what to expect when dealing with a Georgia HOA property, no matter whether you’re buying or selling it.