Home Buying in Washington>Question Details

dricoindc, Home Buyer in Washington, DC

How detailed condo docs must be to satisfy the financial aspect of the transaction?

Asked by dricoindc, Washington, DC Tue Dec 18, 2012

Condo docs came in and although it shows how many and when late fees were charged because of delinquency on the HOA fee, it gives no further info. Not how many, no unit numbers. I'm not sure it's the standard.

Help the community by answering this question:

Answers

2
Kelly Putz’s answer
Hey there,

You didn't mention whether you are looking at DC, MD or VA, so I'll give a general answer for all three.

The state condominium laws differ but all three require such disclosures as: how much money does the association have in reserve, the most recent financial statement including the association's current budget, and any judgments or pending lawsuits against the association.

In Maryland, the buyer must receive the package no later than 15 days before closing, and has the right to cancel within 7 days of receipt. In the District, the buyer must be provided the package 10 days after the contract is signed, and has 3 days to cancel. In Virginia, the package must be given to the buyer within 14 days after a contract is signed. If the package is hand-delivered or emailed, the contract must be cancelled within 3 days from receipt. However, if it is mailed, the rescission right is extended to 6 days.

The condominium association is primarily responsible for preparing the documents and information contained in the package. Typically, the association's property manager compiles everything that is required, but many times, the information is either incomplete or missing. For example, in the District, the package must contain a copy of the condominium instruments. This is a defined term in the DC Condominium Act meaning "the Declaration, Bylaws, Plats and Plans and any recorded amendments". Accordingly, if the package does not contain all three items, this will give a skittish buyer the absolute right to cancel the contract. A buyer does not need a reason to cancel a contract, so long as she is within the statutory time.

Is the association planning major expenditures that will require a large special assessment? Is this a mixed commercial/residential complex, and if so how does this impact on residential owners.

All of these questions can be found in the resale package. The District requires all condominium instruments to be included, it does not require that the rules and regulations be given to potential buyers. In Virginia, while the rules and regulations and the Bylaws are part of the package, there is no requirement that the Declaration be included. And in Maryland, the Declaration, Bylaws, Rules and Regulations are to be given to the buyer, but not the plats.

However, none are required to give unit numbers of those who are delinquent and is a decision of the board on whether or not to do that. Some associations post unit numbers and owner names of delinquent fees on the bulletin board of each building every month as an "incentive" to get them to pay and let their neighbors know whose bills they are carrying. I've seen some condo associations post these with owners owing tens of thousands of dollars in condo fees. As a Realtor, and an investor, I look at those lists as units to watch to go up for sale soon in foreclosure or short sale so I can put an offer on them.

For FHA loan qualification purposes, condo associations have to reveal what percentage are in delinquency AND what percentage are owner occupied, but they have to apply for FHA status each year and would need to reveal that to any potential buyers. The percentage of delinquency will depend on the size of the association, but I believe they cannot be less than 50% owner occupied. That number may be higher, but it certainly would not be lower.

:)
Kelly Putz
Realtor®
DC/MD/VA
Keller Williams McLean-Great Falls
kelly.putz@gmail.com
703-961-8663
1 vote Thank Flag Link Wed Dec 19, 2012
The condo docs vary from association to association. Some may give the further details as some may choose not to do so. Is this something your lender is seeking to make a decision on whether the building is FHA approved?
0 votes Thank Flag Link Tue Dec 18, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer