Home Buying in Tracy>Question Details

Hollie, Home Buyer in Tracy, CA

HOA preparation fee

Asked by Hollie, Tracy, CA Fri Jan 14, 2011

Per the CAR form item 4.d.(4), seller shall pay the HOA preparation fee. But per the seller's Addendum, Seller will contribute up to $0 towards Buyer’s non-recurring closing costs.

My agent told me that Addendum overwrite the CAR form, so buyer need to pay the HOA preparation fee.
The escrow officer said Addendum doesn’t affect what the contract says in the HOA section. So seller need to pay the HOA preparation fee.
I'm confused.

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Answers

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Hollie:

According to the California Association of Realtors, Condominium or Other Common Interest Development documents are LEGALLY-MANDATED disclosures for a typical REO sale in California:

If the property you are buying has an HOA then you may want to inform the REO Listing Agent that according to CAR:

"The seller of a condominium or other separate interest in a common interest development must provide the governing documents and other items to the prospective buyer (Cal. Civ. Code § 1368(a)). There is no exemption from this requirement for REO lenders. The law also requires the homeowners' association to provide these documents to the owner upon written request (Cal. Civ. Code § 1368(b)). "

Also, ask that the Listing Agent to use CAR Form HOA! Citing CA Civil Code §1368 as its authority, CAR form HOA provides THE list of disclosures a HOA must provide to the Seller within a 10-day period of CAR form HOA submission. Page 2 of the form provides for the HOA to notate each item as "Attached" or "Not Available". There is also space for an explanation.

Best, Steve
0 votes Thank Flag Link Fri Jan 14, 2011
California Civil Code 1386 requires the HOA to provide the Seller with the Documents and is very clear that it is the sellers responsibility to request the Docs and to provide them to the buyer. There is a mountain of information on line. Just type California Civil Code 1368 into your search engine

http://www.cardinalpacific.com/consuminfo.html

This link will take you to Cardinal Pacific Escrow Page. It shows the TYPICAL Escrow charges. You'll see that HOA fees are clearly in the Sellers Cost section. Therefore by paying the HOA fees the seller is NOT contributing to the Buyers non-recurring costs. Note: I selected the Cardinal Pacific Co. at randon

You should also know that the purpose of an addendum is to modify the contract as agreed by both parties. The following link will explain

http://www.businessdictionary.com/definition/contract-addend…
0 votes Thank Flag Link Fri Jan 14, 2011
If you want the house you will probable have to pay it. It's usually about 50 buck or so and starts the process with the HOA. You will need a copy of the by-laws and minutes before you are done so be sure to ask for those up front as well. Banks have the final say on most of these issues and they work the entire country so what may go in one state may not be the same in another. The fee is relatively low. If you are happy with the overall price you have negotiated then 'don't sweat the small stuff' Good Luck

Gus
0 votes Thank Flag Link Fri Jan 14, 2011
This is "he said she said" no professional can render an opinion UNLESS full set of documents are reviewed Many times HOA dues are not much a few $200 - or +

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Fri Jan 14, 2011
Sounds like an REO property you are dealing with. Many times the banks addendums will be in conflict or so it may seem. By signing the bank addendum you may be agreeing to surrendering certain rights, or it may be that the addendum is genaric, not taking certain state and local customs into account. Has your agent checked with the listing agent for clarification, the listing agent who should know local requirements should do the right thing. I just closed on a bank owned home with a buyer and while the addendum said it would be up to the buyer to get the HOA resale package, the listing agent had already ordered it
0 votes Thank Flag Link Fri Jan 14, 2011
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