Buying a Home With a Home Owners Association

When buying a property with a HOA there are a few things a buyer must know. The most important being the rules of reviewing the HOA documents. The state of Maryland allows a buyer five days to review the HOA documents/resale package that must be provided by the seller prior to settlement. Once under contract the seller will order the package. Some seller may have already ordered it, but it must be recent. The docs must be no more than 60 days old. Upon review of the docs the buyer can terminate the contract and has no obligation to give an explanation.

The information will include all the rules, covenants, and regulations of the neighborhood amongst other valuable information about the community and the property. Personally, I have had a buyer terminate the contract because the HOA docs did not permit the owner have a satellite dish bigger than a standard TV dish on the property. This particular buyer had a job that required a large satellite be constructed in the back yard. Once he found out that this was not allowed, he had to terminate the contract. Other reasons may include parking regulations, pet regulations, or even gardening regulations. They HOA will usually mandate certain exterior colors be used and any exterior changes to the house or yard must receive approval as well.

Also, you will pay a fee for the HOA. You must include this in your estimated monthly payment, because it must be paid or a lien can be filed. The HOA fee does have it's positives though. What the fee covers will vary, but the may include lawn maintenance, snow and trash removal, general maintenance or certain amenities like pools & playgrounds etc.

When looking to buy be sure to have your real estate agent look into the community and obtain your re-sale package asap. You will also want your loan officer to include the HOA fee in your Good Faith Estimate. Be sure you review the docs thoroughly and are prepared to make the required payment.

Ben White, Gaithersburg Real Estate Agent