Sep 27, 2012

Tip 38-2012: Home Owner's Associations

There is a new trend with Home Owner's Associations (HOA's) attempting to collect fees from both the Purchaser and the Seller at closing. These fees are outlined in the disclosure packet and may include for the Seller property inspection and packet fees. For the new Purchaser, these costs may include set up fees and sometimes advance dues. It is important that the settlement attorneys for both parties receive the disclosure statements so that all required fees can be collected and paid at closing.

Sometimes the HOA's require a copy of the Purchaser's HUD-1 to change the information in their system. If the HUD-1 is a requirement of the HOA, be sure to inform the settlement attorney. It is also important to provide both settlement attorneys with the HOA's address and/or email contact information.

It is recommended that the complete HUD-1 not be provided to the HOA as it contains financial information which the HOA does not need. At the very most, only provide page 1 of the HUD-1, which contains the names and addresses of the Seller and Purchaser, along with the settlement date. The best advice is, however, not to send the HUD-1, but instead provide the HOA with a copy of the signed Deed, which contains the minimum information necessary for the HOA.

PS: There are exceptions to this advice. For example, Lake Monticello requires the HUD to prove that the Property Transfer Fee has been paid.

Contact me at 434-951-0858 or if you have questions.  

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, VA (434-973-7474)

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