When buying or selling a home in an HOA community, you may face certain challenges. Could HOA violations disrupt the transaction? Understanding what HOA violations are and how they can impact a sale is essential. Let’s explore how these violations affect the process and what steps buyers and sellers can take to avoid problems.
What Are HOA Violations?
HOA violations occur when homeowners break the rules set by their homeowner's association. These rules are usually outlined in documents like the Covenants, Conditions, and Restrictions (CC&Rs). The purpose of these rules is to maintain community standards. They also help protect property values.
Common HOA Violations
1. Maintenance and Appearance
● Example: A homeowner ignores their yard. The grass becomes overgrown, and weeds take over. This violates HOA landscaping rules.
● HOAs often require homeowners to maintain their property. This includes keeping yards clean, repainting worn areas, and ensuring homes are visually appealing.
● Impact: Ignoring these rules can lead to warnings or fines. If the issue isn’t resolved, the HOA may place a lien on the property.
2. Unauthorized Exterior Changes
● Example: A homeowner builds a deck without getting approval from the HOA. The deck doesn’t meet HOA guidelines.
● Exterior changes like fences, paint colors, or new structures usually require HOA approval. Failing to get this approval can lead to violations.
3. Non-payment of HOA Fees or Special Assessments
● Example: A seller doesn’t pay a special assessment for a community project. They also miss several HOA dues.
● HOAs depend on dues to maintain community services. Missing payments can lead to late fees and penalties. In some cases, the HOA may place a lien on the property.
How HOA Violations Impact Home Sales
HOA violations can disrupt the selling process. They create uncertainty for buyers, sellers, and title companies. If the seller is not in "good standing" with the HOA, the transaction may stall.
Common Scenarios
● Seller Obligations: Sellers must resolve violations and pay all dues before closing.
● Delays in Closing: Resolving violations can take time. This can lead to delays.
● Liens on Property: Liens must be cleared before the title company can approve the sale.
Steps Sellers Can Take to Avoid HOA Violations
Sellers should be proactive when dealing with HOA issues. Addressing violations early can prevent complications.
1. Check for Violation Notices
● Sellers should contact their HOA property manager. This ensures there are no outstanding violations or fines.
● Example: A seller learns their mailbox needs repainting. They fix it before listing the home.
2. Stay Current on Dues and Assessments
● Sellers should confirm that all HOA fees are paid. This includes any special assessments.
● Example: A seller ensures all payments are up to date before listing their property.
3. Request a Pre-Sale Inspection
● Some HOAs offer inspections to identify violations. This allows sellers to address issues before listing.
● Example: A seller discovers their backyard fence is out of compliance. They make the necessary changes before showing the home.
How Buyers Can Identify HOA Violations
Buyers also play a role in ensuring compliance. They shouldn’t assume all issues have been resolved. Taking steps to verify can save time and money.
Steps Buyers Can Take
1. Ask the Seller
● Buyers can ask the seller if they are aware of any violations.
● Example: A buyer learns the roof needs cleaning. They work with the seller to resolve the issue before closing.
2. Consult the Property Manager
● Buyers or their agents can contact the HOA. They can confirm whether the property is in good standing.
● Example: A buyer’s agent verifies with the HOA that no violations exist.
3. Review the Estoppel Certificate
● The estoppel certificate is ordered by the title company. This document lists all HOA fees, assessments, and violations.
● Example: The estoppel reveals an unpaid fine for an unapproved shed. The buyer negotiates with the seller to address it.
What Happens If HOA Violations Are Unresolved?
Unresolved violations can lead to delays or complications. However, there are solutions.
1. Delay Closing
● Closing can be postponed until the seller resolves the violations.
● Example: A seller asks for extra time to repair a damaged driveway.
2. Escrow Agreement
● The seller may place funds in escrow to cover the cost of resolving violations.
● Example: The seller deposits money for tree trimming into escrow. If the issue is resolved on time, they get the money back.
If neither option works, the sale may fall through. Creative solutions may be needed depending on the situation.
Can HOA Violations Blow Up a Home Sale?
Yes, HOA violations can disrupt or even cancel a home sale. However, most issues can be resolved with preparation and communication. Identifying violations early reduces the risk of complications. Buyers and sellers must work together to ensure all issues are addressed.
Final Thoughts
HOAs are a key part of many real estate transactions. Their rules can feel strict, but they help maintain property values and community standards. Sellers should resolve violations early to avoid delays. Buyers should verify that the property is compliant before closing.
Ready to make your next move? Buy and sell your house with John Marshall. Our team is here to guide you every step of the way. Let us help you navigate the process with ease and confidence.