Financing in 02215>Question Details

Alexp, Home Buyer in South Boston, MA

Buyer pays outstanding HOA fees?

Asked by Alexp, South Boston, MA Fri May 25, 2012


We are almost closing on a condo in MA. The only hold up is condo approval from our lender. They need to see <15% of unit owners delinquent on HOA fees. We have heard this is under $1,500. Is it possible to pay these fees on behalf of other unit owners to get in compliance for our lender?

The seller has delayed (almost 2 months!) on getting condo documents to our lender. I heard nothing of it until a week before closing then this problem comes up.

Any feedback and opinion is much appreciated! Thank you!

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Hi Alex...I usually get this information for my buyer from the HOA prior to writing an offer if possible otherwise a contingency for purchase would be to review the financials, budget current and proposed, the rules and regs, the bylaws and if needing FHA approval if they will qualify or apply for it. As you are already in a situation, I would recommend you consult a real estate attorney for advice on this to see if you could have any repercussions down the road. If the association is not in good shape, do you still want to purchase as you may have difficulty selling when you are ready to move on...If you had a financing contingency in your offer and P&S it usually has a date when you would have to have a committment letter from your bank. If that date has passed and you have not withdrawn your offer to purchase due to financing than you technically could lose your deposits. Please seek legal advice. Most attorneys will give you a consult or flat fee to handle the transaction but make sure you ask up front!
1 vote Thank Flag Link Mon May 28, 2012
I agree that it will probably depend on the lender. Your loan originator should be able to answer that question for you.

I'm surprised your attorney, assuming you have one, didn't get a full set of condo docs to review before you signed a P&S. It's never a good idea to rely on third party representations as to what may or may not be contained in condo docs. Is there a pet policy? What is the % of ownership? What are your voting rights and what % majority is required for changes to docs, amendments or assessments? I think you need to take a step back and make sure you have the answers to these and other questions. The lack of condo docs and the fact that there are delinquent owners puts up a big red flag to me. I strongly advise further investigation on your part.
1 vote Thank Flag Link Fri May 25, 2012
I think you are better to walk away from the deal. You should be able to do so based on your finance contingency.
1 vote Thank Flag Link Fri May 25, 2012
This is a reason to use an attorney.
Most legal advisors, which i am not, have experience and know how to get the best info more quickly than you have experienced.
Less than 15% is a pretty strict criteria.
You might call afew banks and see if that is specific to your lender or a standard across the industry.
A local bank may have different criteria if they are not selling the loan on the secondary market.

However, >15% delinquent owners in a condo may be a tell or a larger problem in that complex.
Are the fees too high?
Is there internal fighting / disputes?
Be careful.

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0 votes Thank Flag Link Sun Jun 3, 2012
Did you use Buyer Agent? Do you have a reputable attorney representing you? A "no" to either or both questions explains why you are in dire straits right now. Either would have ensured that you received all condo documents, including budgets within the usual and customary 10-business day review period before signing the P&S. Since you signed the P&S without these documents in hand, my guess is that you are a professionally unrepresented buyer. If you had worked with an Accredited Buyer Representative - which costs you nothing, by the way - you would have had an entirely different outcome.
0 votes Thank Flag Link Sun May 27, 2012
You may also ask yourself if you want to become a homeowner in an association that has owners delinquent on their fees. I would take a very close look at the financial statements and make sure that the association has enough to cover expenses if unit owners don't pay. Otherwise you may be carrying more than your fair share of water/sewer and master insurance, let alone maintenance costs. Especially if it is a small association.

Find out why they are in arrears, if there is a plan to become current and what your share would be if the same unit owner(s) do not pay again in the future.
0 votes Thank Flag Link Fri May 25, 2012
Hi Alex,

I think the answer to your question may vary depending on the lender you are with. If it becomes a permanent issue I do have a product that allows for >15% of the fees being past due. Happy to answer any other questions you might have.

0 votes Thank Flag Link Fri May 25, 2012
You can certainly offer to do it, through your agent, but please research this further with the HOA first so you know an exact number.
0 votes Thank Flag Link Fri May 25, 2012
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