Here at The Peters Company we recognize that selling your home is not the world’s easiest task! There are many components that go into prepping your home for the market, and we aren’t even talking about packing up yet! As times have changed, so have the requirements for selling homes, and if you live in a community with an HOA (home owners association) there is a good chance that selling your home can be become a bit more complex. That’s because the buyer, the buyer’s lender, and the closing attorney all have to be involved when it comes to closing a home with an HOA.
There is a pretty hot topic going around the world of real estate right now and it’s involves an HOA closing letter. Generally, there are fees that must be paid at the closing table that are associated with the HOA. These are typically the buyer’s responsibility (at the time of this writing in June 2018), but there is one fee that is almost always the responsibility of the current owner/seller. That’s the “HOA closing letter”.
An HOA closing letter is a statement that provides information such as: initiation fees, annual dues, a balance of outstanding dues owes, transfer fees, capital contribution fees, and any fees that are required to join the homeowner’s association. This letter serves as a benefit for all parties as it ensures that all fees past and present are collected at the time of closing. In order to obtain this information, the closing attorney must request a closing letter on the property prior to the close date.
Because an HOA has to take the time/effort to provide this information to the attorney prior to closing, many have started charging for the letter. The amounts vary greatly – sometimes there is no fee for the letter, but this is rare. Typically they vary in price starting at $150, and it can be upwards of $300 depending on the HOA. Unfortunately, there is no way around it, and this must be collected prior to closing. There is currently legislation in place to attempt to cap the amount for the letter, but at this time no agreement has been met.
Ultimately, this letter is a necessary ‘evil’ that does protect all parties involved. Want to be in the know about all things real estate so that there are no surprises when selling a property with a homeowners association? Reach out to The Peters Company and we’ll guide you through the process!
– Jennie Moshure