HOA Addendum – Hey there, realtors and buyer and seller clients, did you know that the addendum can give and it can take, you’re probably thinking to yourself, what is this guy talking about? Let’s show this guy. Who is this guy? You know, what is he even doing? That is Shana Acquisto. She is a luxury real estate broker. And I’m her husband Mike and I just sit in a Real estate broker.
Oh, yeah, that too. So what we’re going to do is go over the addendum. Let me see my notes here. No problem. We’re going to pull it up on the screen for you, but we’re going to tell you how you can get out as a buyer, how you need to keep people in if you’re a seller and we’re going to tell you kind of what to be aware of. So there’s a bunch coming right at you now. Omkar, split that screen for us, please. Go ahead, Shana.
So this was one of the changes in our last contract update. And just want to make sure you guys are aware of something. So if your property if the property you’re selling or the property you’re buying is in a mandatory HOA, you have to have this addendum in your contract. OK, and what this does is it actually. Let’s people so what it what it what this does is it the seller is required to give you information? Well, actually they’re not required. That information is something that you’re going to want to know from a buyer standpoint. So let’s talk about it from a buyer standpoint first.
So you can check on the subdivision information to either I want the documents or I don’t. Doesn’t matter. You don’t have to have the documents. But as a buyer, you do want the documents.
So you would know some of the restrictions in your way is going to have some restrictions and covenants in there that you can and can’t do. They’re going to maintain things like common area maintenance type things, maybe like the entrance to the neighborhood. They’re going to also tell you what you can and can’t do For chickens in RV out front. Could you, you know, have goats free roaming?
Can you have a home based business? Like, there’s a multitude of things that you need to be aware of.
What hours are the pool open?
I don’t know about that. OK, so I really want to focus on here is see OK, see our fees and deposits for reserves. This is where this is outlined. And there’s been some questions on what is really included in that. So before, if you guys are or if you remember, there was, you know, the resell certificate and then there were fees to transfer the way resell certificate to the from the seller to the new buyer.
OK, well, we’re seeing this happen all the time and it’s different all the time. But we’re seeing fees such as capital improvements. Right. And all kinds of strange fees. We’re also seeing if you’re a seller, sometimes there is a fee to sell your home that they charge you like I could transfer tax credits, and if you’re a buyer, you also have to pay it. So let’s read this together, OK?
Except as provided by paragraphs A and D. OK. Buyer, buyer shall pay any and all association fees, deposits, reserves and other charges associated with the transfer of property not to exceed blank, and the seller will pay any excess. So if you’re old school and you’re thinking, oh, I’ll just put my two hundred dollars in there, three hundred dollars, that’s what I think the resale certificate is. That is not correct.
This includes those capital improvement fees in a trance, anything related to the transfer of that property. So if the sellers charged a fee, that’s part of it. All of that is included. OK, so you want to be very careful what you put in here. So what you want as a buyer is want that fee to be very low. Right, and that you want the seller to basically have to pay for all of those fees?
Well, so the seller should probably know every single fee that’s should be due, because when they when they acquired the property rights all over the place, you know. OK, oh, bourbon. I must be really clear on what I was doing, so I was bourbon. So the reason that we’re going to have this is because the seller knows all the fees they purchase property. At one point they knew what was transferred and what they paid. The buyer is unaware possibly of any one of those things.
Now, there’s a set number that you put in not to exceed whatever that is. And then the seller would be the one who negotiates and would be like, oh yeah, I see that you put two hundred in here. It really cost us, you know, two thousand to transfer this property. So we’re going to need to have you change that to two thousand or they know that they’re accepting eighteen hundred dollars of liability and that the buyer would be paying two hundred
In that case. So we were under the assumption that the capital improvement fees that was a buyer. The buyer’s coming in. They now have to deposit these reserves and all of these things in there from a buyer standpoint. But that is actually related to the transfer of the property and that’s going to be included in that.
Yeah, and I really like that because I feel that there is too many people that we’re all of a sudden getting to closing. And there’s like what? I have this transfer fee. I have to pay this capital improvement fee. What is this all about? And the onus is would be in this situation on the seller to understand that and to disclose it into
It is correct. Now, let’s talk about how this could be an out for your client. So if you have a listing and you know that this listing is a part of a HOA, then you need to prior to Media Day. Order the the docks, we want those docks because once you provide them, you go under contract. Once you provide them to a client, you have three days after that to terminate the contract.
So you don’t want those three days in there. So people are foregoing option periods and, you know, kind of waiving everything. And this has kind of been under the radar. But this is a way that a buyer has an out in the contract if the seller doesn’t provide. In a timely fashion, so my suggestion, and this is what we’re going to do,
I guess, is not a suggestion, Shana is making a new policy Alert. So if your property is in a way and you’re a listing agent, you need to order these documents before it gets listed. And we’re going to have them on MLS in the documents. So they are received.
That’s great. I love that one is going to actually do this. Why are you going to call up are you going to call me to order this for you? Yes. No, no, no. That was exactly the wrong answer. I’m not going to be doing this for you as a listing agent. Are you going to do it for him? I am not going to. Sean is not going to do a listing.
Agent needs to be in charge of this. It’s going to be important for you to get the information from your buyer, from your seller. Know, the phone number of the management company is. And you’re going to need to reach out to them and get these on order. Now, there’s a fee for that. So your seller is going to have to pay that fee up front. So it’s something you’re going to have to discuss when you’re listing the property. It’s like an upfront cost that they’re going to have to incur. Pay it directly to them. But, you know.
All right. So I’m going to move this up in the inner process. So I’ll work this into the blueprint here in the very near future. So get super excited about that. But you’re going to have to request this. And I’ll put it way up top after you have your listing agreement signed for you to go ahead and do that as a listing agent.
Yeah. So just be aware of this. This could get a little hairy at the end and cause some confusion, and we don’t want that to be the case.
So as a seller, you want to eliminate not having that document in time and giving the buyer potential out in that way is to simply get it in advance and skip those three days. Right. And just provide it right on MLS and you’ll get less calls, less less questions about it.
You want all documents and the resale certificate. Now, if they tell you we need the new buyer’s information, well, we don’t have that yet. OK, so we can give that to them once we have a buyer. But if you get any pushback on that, let me know. But I think they’ll appreciate getting the money and I’m sure they’ll work it out.
So OK. And then tell them that, you know, the time and people are doing no options. And it kind of is what it is all about. But TBD in there and I think your seller will appreciate that. You’re like, hey, you know, once they receive these, they have three days to terminate the contract. So we don’t want that. We don’t want that to be the case. And it also helps you identify miscellaneous expenses that you were unsure of. And it avoids a last minute problem any time, guys, any time.
And ladies, that we can do something in advance to eliminate this last minute hustle. If calling somebody at five o’clock on a Friday to ask for a favor, can you get me this Rechelle certificate? I need it because it has to be back on. Right. I don’t do that. Schedule your work and make it easier on yourself. Right. Do it like way up front and avoid this problem. All you’re looking for is drama. If you do it later.
And nobody’s got time for drama, do they, Shana? No, they don’t. Nobody. How it. Nobody. Susan, yeah. I don’t know, you don’t know? Well, I’m not going to use Susan’s voice because ain’t nobody got time for no drama like that, she’d be waving her finger. And why did I just do that?