Selling a property within a homeowner association (HOA) community presents distinct differences compared to selling one outside of such a community. In fact, selling an HOA home involves more steps and has more areas for buyers and sellers to take into consideration. Additionally, buyers must adhere to the HOA’s rules and regulations governing aspects such as exterior modifications, noise levels, and even the types of vehicles allowed in the community. While these rules can maintain property values and community aesthetics, they may also limit individual freedoms and require buyers to thoroughly review and accept the HOA’s by laws. Conversely, selling a property outside of an HOA community offers more autonomy to homeowners in terms of property usage and modifications. However, the absence of HOA oversight may lead to less uniformity in neighborhood upkeep and fewer shared amenities.

HOA Fees and Fines

When considering a house in an HOA community, potential buyers must calculate the additional financial commitment associated with monthly or annual HOA fees. These fees typically cover amenities and maintenance services, such as landscaping, security, and communal facilities like pools and gyms. While these amenities can enhance a property’s appeal, they come with a downside: if the homeowner fails to pay the community’s monthly or annual fees, the association often has the right to place a lien or even to foreclose on the home and force the homeowner to leave. Homeowners in this situation would be forced out of their homes by the HOA even if they are up to date on their mortgage or have no mortgage at all.

A similar dynamic exists with regards to HOA fines. As they can with fees, HOAs in Florida have a statutory right to place a lien on houses in their communities, charge interest on fines when past due, and potentially also foreclose on houses for past due fines.

Transfer Fees

The Homeowners Association (HOA) transfer fee constitutes a singular charge intended to defray expenses associated with the transfer of the property from one homeowner to another. This fee is customarily determined by the HOA or management company contracted by the HOA and may vary between $100 to $500. It is intended to offset expenditures inclusive of but not limited to: document preparation and dissemination, database entry revisions, alteration of security codes and access provisions, issuance of new security credentials, and the rekeying of property locks.

While HOA transfer fees may be considered an insignificant transaction cost when compared to the typical value of a Florida home, they are still an additional cost above what would be paid for a non-HOA transaction.

“Homeowners [can] be forced out of their homes by the HOA even if they are up to date on their mortgage or have no mortgage at all.”

Disclosure Documents

Any residential real estate transaction can be paper-intensive for both the seller and buyer. This is especially true if the home in question is in a Florida-based HOA. This is because Florida HOA’s require that home resale packages be delivered from the seller to the buyer. Resale packages fill in the buyer on the rules and regulations of the HOA, the HOA’s current condition and whether the seller currently owes any fines or dues to the HOA.

The paperwork in a resale package protects the HOA legally and financially and provides information that many buyers would want to know before making a property purchase inside an HOA community.

Denial of Sale

An HOA has the power to deny the transfer of property through sale to certain individuals. In doing so, the HOA must be careful not to violate the Fair Housing Act which prohibits discrimination based on religion, race, nationality, ethnicity, family status and a number of other protected characteristics. Still, the power to prohibit a sale based on such factors as creditworthiness, criminal background and other non-protected characteristics can present a major impediment for a homeowner and prospective buyer. HOA denial of sale cases are a frequent matter that the HOA or association law practice area.

The Importance of an Attorney

Many buyers and sellers attempt to “go it alone” legally in HOA transactions working with a title agent and a realtor but not hiring a lawyer. In most real estate transactions, it is a good idea to hire an experienced real estate attorney, but in HOA-related transactions it is essential. A good real estate lawyer can ensure:

Time Management: Manage the deadlines to make sure that sellers and buyers remain compliant with their obligations to HOA’s and lenders and deliver their offers and other documentation on time

A Higher Probability of Closing: A residential real estate sales agreement is a legally binding document, as are the governing documents presented in a home resale package. Why leave these documents up to open interpretation when you can review them prior to incurring obligations with a qualified and experienced real estate attorney. Ensuring that your rights and obligations are clearly understood and that your best interests are represented before any potential conflicts or complications occur means a smoother and more fluid transaction. Remember, your title agent and realtor cannot give legal advice, only a lawyer can do that!

South Florida Law

There are many reasons why it is important to contact an attorney as early as possible in the process of buying or selling a property in Florida. This is especially true when the complexities of managing an HOA-related transaction are considered.

If you are selling or are looking to buy an HOA property in South Florida, then call us today for a free consultation (954) 900-8885 or reach out via our contact form.