Home Buying in San Jose>Question Details

?, Home Buyer in 95128

I bought a foreclosed condo. The assessment study is missing and the bank will not provide it. Should I walk away?

Asked by ?, 95128 Fri Apr 22, 2011

I removed all contingencies except the one regarding the HOA docs. My agent tried multiple times to get the Assessment study but the bank is not responding. I want this condo but I am not comfortable buying it without all the information due to me. Can I go ahead and later get the Assessment study for myself? What would be the consequences? Thanks.

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Hello Buyer and thanks for your post.

I read all of the comments from the other Realtors, and feel that some of them may have been misled by your question, and, thus, the comments were a little off the mark.

So let's back up a little and talk about what you should be getting from the homeowner (in this case, the bank) when buying a home in a common interest development or homeowners association. The Civil Codes of the State of California dictate what we, as management companies, must provide to homeowners or buyer of units or lots within an HOA. Here is that list:

1. 12 months of Board meeting minutes
2. 12 months of newsletters or correspondence to the general membership
3. Copy of the year end financial statement (if the Association has income in excess of $75,000 per year, the financial statement should be a report from the CPA, called a "review")
4. Copy of the most recent financial statement (draft) approved by the Board of Directors
5. Copy of the annual budget
6. Copy of the governing documents (the CC&Rs, bylaws and articles of incorporation)
7. Copy of the most recent reserve analysis.
8. Statement regarding whether the homeowners association is currently engaged in or is contemplating litigation.

As you can see, there is no reference in the list above to an "assessment study." In short, Buyer, there is no such thing as an "assessment study." In fact, I can understand how, if you were to ask, both the management company and the bank will be scratching their heads asking why you are asking for a non-existent report. If you are referring to the reserve study, most of the times, this report is attached to the budget. If you don't know what you're looking for specifically, consult your Realtor.

If you feel that you are missing any of the documents from my aforementioned list, contact the title company to request a set from the management company. You will be charged a fee for processing the documents, but you will have a complete set without the hassles of trying to contact the manager or getting turned down.

And, one more thing, management companies will NOT talk with buyers or their agents. To be frank, the management company is responsible only for working with homeowners of record, and the buyers must obtain their information from the seller or the seller's agent. In fact, legal experts in our field (HOAs) have always cautioned managers NEVER NEVER NEVER to talk with Buyers because our answers can be construed as adversely affecting or misleading a buyer in the sale and then, voila, we're in court over something that was said. Thus, we won't answer your questions when asked--sorry.

So, have your agent contact the title company to get copies of the documents. Be prepared to pay for the document charge to obtain copies.

Good luck, and if you have any other questions, please contact me at the email address below.

Sincerely,
Grace Morioka, SRES
Area Pro Realty-People's Choice
Homeowners Association Manager/Consultant
Co-Author of the Book: "Homeowners Associations: A Guide to Leadership and Partcipation"
email: graceareaprorealty@att.net
3 votes Thank Flag Link Tue Apr 26, 2011
Are you Kidding me? I tell every buyer I have had (thousands) to talk to the neighbors to see what they like and don't like about the neighborhood, block, etc. I tell every buyer who buys a condo or townhouse to knock on doors, talk to neighbors to determine how the complex is and who they will be living around. I give them the phone number of the association so they are aware of what they are dealing with. This goes so far beyond and above handing over HOA documents. I give them the Megans law info and the web site for crime statistics in the area. This buyer said he wants the condo. So, if his agent doesn't give him what he wants, is he supposed to give up? I think not. Giving them the info and having the buyers be a part of what is going on is good real estate practice. With them being a part of the process, it keeps the buyers from being naive and unwary. The buyer always needs to have choices and options whether or not the realtor is supplying what is needed. I don't know how it is in your area, but sometimes, the buyer can accomplish more with one phone call (because they are the principals) the the agent with 20 phone calls. Just another way of looking at this entire process :-)
2 votes Thank Flag Link Fri Apr 22, 2011
I won't be so brash as to insult your intelligence by telling you to "take some responsibility". It's quite obvious you are taking some responsible action by posing your question to this professional community forum. Some professionals get a little short with naive or unwary home buyers so please don't take it personally or feel intimidated.

There are plenty of responsible and sensitive professionals in the Trulia community who would love to help you as is evidenced by the majority of comments you've received thus far. Frankly, I don't blame you if you're reticent to knocking on a strangers door. That's what you hired your professional agent to do.

In answer to your question? Yes, you have every right to demand the assessment and your agent has a responsibility to see that you get it. Hold his feet to the fire and insist that he get it to you forthwith or there will simply be no closing. That will surely motivate him/her. It would me.

No agent wants to lose a deal over something that trivial. If that doesn't work contact the agent's broker directly. I'm sure they would get it resolved immediately. This is a very rudimentary and reasonable request. So geeetterdone!!
1 vote Thank Flag Link Fri Apr 22, 2011
I know what you are looking for, though it is not called assessment study. Usually the buyer pays for it unless negotiated up front in the contract. Banks will usually not supply anything that is not legally required and sometimes not even that.
0 votes Thank Flag Link Wed May 4, 2011
Home Buyer,

Grace is right on the mark with her list of required documents. And if the association documents that you receive are missing a substantial number of this list of documents then I consider it a big red flag and potential liability for you as a mismanaged complex. Proceed cautiously and know the correct terminology for what to ask the seller for.

Barbara Stewart
Alain Pinel Realtors
408 406-1343
0 votes Thank Flag Link Wed May 4, 2011
"They gave me one page projected budget for the year which indicates they are in the negative."

Based upon that statement alone, I've seen several banks opt to not fund deals on several condos relatively recently. You need to do a heart check with your lender to get a pulse for where they are on this right now.
0 votes Thank Flag Link Sat Apr 23, 2011
Thanks for the replies. My agent has been calling the management directly. They would not give her the info since she is not an owner. She did suggest talking to neighbors but I think that is a bit intrusive. I have all the CC&Rs which I had read and the minutes from the past year. Like I mentioned before I have everything except the Assessment study. They gave me one page projected budget for the year which indicates they are in the negative.
0 votes Thank Flag Link Sat Apr 23, 2011
Mr. Home Buyer, don't you dare "pay for your own study". That's rediculous!! You're buying the home for crying out loud. Let the agent, seller, bank or whoever's in charge pick up that tab. Terri has some very good points, however. You should read her comments very carefully. In fact she has the best answer yet. It's a lot easier to make a couple of phone calls than it is to knock on some strangers door.
0 votes Thank Flag Link Fri Apr 22, 2011
In today's market, it is very important to receive the HOA docs before closing! One never knows what may be going on with the HOA. Some HOA's are having financial difficulty, some are not allowing rentals, some may be about to assess an extra fee for new roofs / fences / pool repair, etc. And some HOA's are doing just fine. In any case, stick to your gut feeling and get the HOA documents. Your agent should be your best resource for getting the documents you need, but you can make the phone calls too. After all, you are almost the owner. Good luck and I hope you get what you need.
0 votes Thank Flag Link Fri Apr 22, 2011
Banks in many instances can turn these documents over to you. if you want the study pay for your own.

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 Apr 22, 2011
Yo Gteam......love your passion! I actually chime in with you on this rant. It is up to the buyer to exercise some initiative. That goes without saying. If I were to move move into a townhome/condo/duplex, etc. situation I would certainly like to know a little about my neighbors. But that's not what I was gleaning from your comment.

It actually sounded like you were scolding, or at best reprimanding, the buyer. You failed to articulate that message in your comment. It's all about communication my friend. Or let me digress. It's about effective communication. You came across as irritated that the buyer was at fault. That's all I was questioning.

Now that you've honed in on the real subject matter, which makes a lot of sense, I agree. If I were going to purchase a property anywhere I would certainly want to know my neighbors. So I would take it upon myself to do some homework.

But having said that just take a moment to reread your comment. you sounded rather brash, if not irritated at the buyer for something that should be incumbent on a conscientious agent to deal with. Just a thought.
0 votes Thank Flag Link Fri Apr 22, 2011
Take some responsibility, contact the association your self. Look online for some other info or go knock on doors in the complex and find what you need to do, and what others feel about the complex. Come on, take some action and participate in your purchase.
0 votes Thank Flag Link Fri Apr 22, 2011
Ask your agent to go directly to the Association to get what you need. I've done this more than once and It's not that uncommon.
0 votes Thank Flag Link Fri Apr 22, 2011
I would get it first. Your agent should know who the HOA company is to get it. Should also make sure that the property doesn't have any back HOA dues due. The factor is what are the reserves and do they plan to increase?
0 votes Thank Flag Link Fri Apr 22, 2011
Is the Assessment Study required from your lender to close? You need to check that out. The information for that comes from the HOA. I would call them directly and ask if it is available and if so how to get it.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Fri Apr 22, 2011
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