When you are buying property, you may find a home you love which has a homeowner’s association. If you have never had a homeowner’s association, you may be wondering what documents you need and which documents are important before you close on your home. Luckily, with the help of a skilled attorney, they will provide you with the correct homeowner’s association documents well before you sign on the dotted line.
When you buy a home part of the requirements of the contract is that you are the receive copies of the home’s homeowner’s association documentation. This documentation includes, copies of all annual meetings minutes, copies of the financial records from the association, a paid assessment letter showing how much is owed on the property and up to that date, rules and regulation, bylaw, articles of incorporation, declaration of covenants, conditions and restrictions. These should all be provided to you before you close on the property so you have time to review them. Your lender may also have an interest in the homeowner’s association documents. These can be very telling of the property’s financial state and some lenders may require a check list of items to be cleared before giving you a loan.
When you receive your documents, the first main document of the most importance is the rules and regulation. These are the day to day rules of your property. For example, there could be a rule stating your home needs to painted only one color, or any outside decoration are prohibited. Another big rule which many people see is pets. The homeowner’s association may only allow certain pets, the pets may have weight limits or even breed restrictions. This can be a big deterrent when finding a home, if your pet cannot come with you. These are day to day rules you need to live by and should be the first thing you check to be sure if you are in agreement. If not, there is not much room for any negotiation and you may need to find another property if there is a major rule which causes an issue.
The next documents you should look at, are the financials of the homeowner’s association. You should be checking how often the homeowner’s association’s monthly assessment has risen in the past few years. You should check the balance in the reserves the homeowner’s association has left over. You should look at upcoming projects as well. If you receive your documents and it appears there are not many funds, it means the property could be looking at raising the monthly assessment in the future or even a special assessment on the property. You need to read these documents clearly and reach out to a trusted real estate broker and attorney to help you make informed decisions. Often times, an attorney can even help you negotiate if there is an issue. You should read all the documentation clearly to make an informed decision regarding your new potential homeowner’s association.
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Local attorney Andrew Szocka, Esq. provides thorough and speedy real estate help in the Chicagoland area. To schedule a free initial consultation, visit the Law Office of Andrew Szocka, P.C. online or call the office at (815) 455-8430.