Home Buying in 33625>Question Details

David Ashton, Home Buyer in Tampa, FL

HOA rent restrictions (single family home) were not provided utill day of closing resulting in cancellation because we could not carry two mortages.

Asked by David Ashton, Tampa, FL Mon Nov 22, 2010

We had been looking for a smaller home to purchase then rent for 2-3 years and retire to it. We spent 6 months with an agent emphasizing thisrequirement and turning down several properties because of rent restrictions. We found a house, signed a FAR-BAR As Is Contract(also bank approved short sale)and found out on my own 4 hours before closing that the house had a 12 month rent restriction from the HOA. We postponed the closing for a week in an attempt to get the HOA to allow us to rent but they could not allow it forcing us to cancel the sale. We spent over $1,400 (in addition to $1,000 escrow) for appraisal, inspections, pool cleaning,etc. and felt that had the restriction been made known to us at contract signing, we would not have moved forward with this purchase. Who is responsible for not providing this rent restriction information? I want to recover the $1,400 as well as my escrow but other than small claims court how do I do this?

Help the community by answering this question:


In NC - a caveat emptor state - it is the buyers responsibility to uncover details pertinent to the sale. When you hire a buyers agent you transfer much of that liability to him/her. A good agent will provide CCRs and other legal information to you prior to contracting, read the material and check with the management company, documenting the determination. Your state will have a real estate commission. Call and ask what your recourse would be in your specific situation. Good luck!ns

Beth Blevins
Concord, NC
0 votes Thank Flag Link Wed Nov 24, 2010
You should contact a lawyer because it's a legal problem which is beyond Realtor's duty.
0 votes Thank Flag Link Wed Nov 24, 2010
Hi Again,

In Florida, there is no requirement for a buyer in an HOA to be given a copy of the governing documents, the only requirement is that the buyer is "notified" that they are buying in an HOA that may have restrictions and that the records are publicly available.

Other states may have other requirements but here in Florida (unless the contract has a special provision requiring the Seller to provide HOA docs to buyer and a review period) the buyer is not automatically entitled to a copy of the HOA docs. The standard Florida Seller's Property Disclosure also contains specific information about rental restrictions but the written Seller's Property Disclosure is also not a mandatory form per Florida Real Estate law.

All my best,
Alma Rose Kee, PA
Future Home Realty, Inc.

PS If you would like to see all Active, Pending and Sold listings, you can sign up for a free Listingbook account. on my website. No obligation, just free info.
0 votes Thank Flag Link Wed Nov 24, 2010
If you plan on renting a property that you buy, your real estate agent would be able to get that information for you, if she doesn't already know the answer. A copy of the CC&r's will be sent to you during escrow disclosing all restrictions by the HOA. However, if the title company is not on their toes, you may not get this until well into the escrow period. Unfortunately, there is no rule or law in Arizona that states your agent or escrow company, or anyone else is obligated to volunteer this information at any specific time prior to closing. This is one of those "buyer beware" situations. However, if your real estate agent was aware you planned to rent the property, common sense, and good service would denote that she ask the escrow company to send you the CC& R's to you ASAP, when escrow is opened (or find out prior to writing the offer.
Web Reference: http://paysonazhome.com
0 votes Thank Flag Link Wed Nov 24, 2010
Did you ever receive an "HOA Package" from that particular subdivision? All regulations would be stated in there and you are allowed to cancel a contract if there is any wording within that Package that you do not like.
0 votes Thank Flag Link Wed Nov 24, 2010
Your offer should have had a contingincy that you have say 7 days to review and accept hoa docs which would have protected you and saved you from spending any money. At this point you need to see if the agent or seller violated any state laws by not disclosing any specific information that the law states they need to. Good luck with working things out
0 votes Thank Flag Link Wed Nov 24, 2010
Hi David,

Sorry you had to experience this ordeal.

If you signed a Homeowners Association Addendum then you have no recourse. Florida laws do not require the seller to provide a copy of the HOA documents. The responsibility is 100% on the Buyer to obtain copies of those documents from public records or pay the fee to the property management firm (if there is one) for the HOA. This should have been during your due diligence (inspection) period.

Now, if you did not sign the mandator HOA addendum then you have the right to cancel your contract and get your deposit back.

It sounds like your contract was contingent on obtaining financing and you could not qualify because of the 1 year rental restriction so you should be able to get your deposit back.

So, again, if you signed the HOA addendum and didn't review the HOA governing documents (not a contractual requirement) then you were notified that you could obtain these documents to review. Also the Seller's Property Disclosure that you should have signed would have also indicated there are HOA restrictions on renting.

You should be able to get your escrow deposit back if you have a denial letter from your lender. Alternatively, could you move into this house for only 1 year and then rent it out? I know it isn't what you planned but may be worth the inconvenience.

Hope this helps.

All my best,
Alma Rose Kee, PA
Future Home Realty
0 votes Thank Flag Link Mon Nov 22, 2010
Florida Statue 720.401specify that "A prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale" and furthmore " The disclosure must be supplied by the developer, or by the parcel owner if the sale is by an owner that is not the developer. Any contract or agreement for sale shall refer to and incorporate the disclosure summary and shall include, in prominent language, a statement that the potential buyer should not execute the contract or agreement until they have received and read the disclosure summary required by this section".
After receiving the disclosure summary, the buyer has 3 days to cancel the contract or prior to closing, whichever occurs first.
For more information please refer to Florida Statue 720.401.
You should also seek legal advice.
0 votes Thank Flag Link Mon Nov 22, 2010
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