Moving out of HOA communities is not as easy as you might think. The process involves a few extra steps than moving out of a non-HOA home would. If you’re thinking about leaving your homeowners association, here are the things you should do.
What to Do When Moving Out of HOA Communities
Homeowners associations offer a lot of benefits to members, but living in these communities also means having to jump through a few extra hoops when you want to do something. For example, making any changes to your property would typically require you to go through an architectural request and review process.
The same goes for getting out of a homeowners association. If you intend to move away and leave your HOA behind, you can’t simply sell your house, pack up your things, and jet off. There are some crucial steps you mustn’t skip. Here is your guide for how to leave a homeowners association.
1. Let Your HOA Know
First things first — you must inform your homeowners association of your plan to move out. Let your HOA board know that you intend to sell your home. In some communities, this is even required.
Remember to go through your association’s governing documents to see if there are any unavoidable steps you must take. The HOA board or your community manager may also be able to guide you through this process. Informing them early on will allow you to make necessary preparations ahead of time. This way, you won’t find yourself rushing to make any deadlines.
2. Settle Any Unpaid Balances
As you may already know, being part of a homeowners association means having to pay regular dues. Your association may even impose late fees and fines for violations.
If you have been paying these dues, fines, and fees religiously, then your HOA account is probably squeaky clean. That means you don’t have any outstanding balances with the association, leading to a smoother sale. But, if you owe any money to your association, then you might find that your home already has a lien attached to it.
Debts and liens can significantly hamper the selling process. If you have any unpaid dues, you might even have a hard time moving out of your home. Therefore, you should check with your HOA board about any outstanding debts you may have. Then, go ahead and settle them before putting your home up for sale.
It is worth noting that you can still sell your home even if you owe money to your association. The process will just be more difficult and any unpaid fees will likely be deducted from the money you earn from the sale.
3. Research Selling Requirements and Fees
As with any transaction, the smooth sale of your home depends on whether or not you meet the requirements. Before listing your home, make sure to research any requirements as stipulated by your association or state.
For some sellers, it may be necessary to complete certain paperwork before you can pass ownership to the buyer. Other associations only allow you to move during certain hours of the day. Many HOAs also charge transfer fees when a property’s ownership changes hands. These fees can come in the form of a flat rate or a percentage of the sale price.
4. Schedule a Home Inspection
In many associations, it is mandatory to schedule a home inspection before moving out of HOA and transferring ownership. This responsibility typically falls on the shoulders of the seller, though it can also vary.
A home inspection, otherwise known as a compliance inspection, ensures that your home conforms to the association’s CC&Rs when it comes to property use and restrictions. For instance, your homeowners association may not allow a specific color of paint on the exterior of homes.
The inspection is usually carried out by the HOA management company or the Architectural Review Committee. Should they find that your home is in violation of certain guidelines, you will need to remedy the problem before you can complete the sale.
5. Make Sure Potential Buyers Are Aware of the HOA
There are some people who dislike living in a community run by a homeowners association. This is mostly because of the many rules they have to follow and the fees they must pay.
As such, it is your responsibility as the seller to inform potential buyers of the existence of your HOA. In doing so, buyers are not caught by surprise and can make an informed decision.
Apart from letting potential buyers know about the HOA, you may also need to supply them with certain documents. Some might ask for a copy of the association’s governing documents. This way, they can familiarize themselves with the community they might be living in. Some buyers even back out of sales just because they don’t like the rules of a given community.
6. Prepare All Necessary Documents
In a lot of cases, sellers will need to prepare resale packages and other transfer documents to give to the buyer at closing. A resale package consists of the association’s governing documents as well as information concerning HOA dues. Many homeowners associations make it mandatory for sellers to supply buyers with these documents.
Don’t worry, though, since your HOA board or community manager will be able to help you with this process. Most of the time, the homeowners association will provide you with this package which you must then hand over to the buyer. In doing so, the association ensures the buyer is aware of the community’s rules before the sale closes.
Keep in mind that incomplete documents can hinder the sale and even cause potential buyers to back out. Therefore, you must pay great attention to this step to ensure a smooth transaction.
A Hassle-Free Move
Moving out of HOA communities can certainly be overwhelming, especially with all the extra steps involved. As a seller, you have more responsibilities — from talking to your HOA board about the move to supplying the buyer with important documents. If you want the process to go without a hitch, though, you should do your research and make preparations ahead of time.
Homeowners associations can make the moving process significantly easier for their members with the help of an HOA management company. Call Cedar Management Group today at (799) 252-3327 or contact us online to request a proposal.
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