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Condominiums and Other Common Interest Subdivisions - Buyers are solely responsible for reviewing and evaluating documents provided by a homeowners´ association ("HOA") relative to the sale and purchase of real property in a subdivision or incorporated area. Real property located in common interest subdivisions, commonly known as condominiums, typically is subject to certain covenants, conditions and restrictions (CC&Rs). The CC&Rs, which impose limitations on the use of property, are administered by a HOA. Such associations usually collect dues from property owners residing in these areas to provide funds to maintain so-called "common areas". By law, such associations generally must provide buyers of properties within their jurisdictions with certain documents, as well as any addenda, amendments or revisions thereto, including but not limited to: Rev. • CC&Rs; • Bylaws; • Articles of incorporation (if the HOA is incorporated); • Rules and regulations and other governing documents; • Statement of residency restriction based on age (if applicable); • Statement of assessments and fees, including any unpaid charges which may become a lien against the property; • Most recent financial statement distributed, as required by law, including a pro forma operating budget and a reserves study; • Lien assessment and enforcement policy statement; • Summary of HOA insurance coverages; and, • Preliminary list of defects for any construction defect lawsuit or if the case settled a list of the defects that will be corrected or replaced, a good faith estimate as to when the corrections or replacements will occur and the status of any claimed defects that are not on the correction or replacement list. Buyers are solely responsible for inspecting and evaluating all such documents relative to the sale and purchase of real property in any subdivision. Buyers should not release any contingencies in this regard until they are fully satisfied with the information provided in the documents. Particular attention should be given to the financial statement provided by the HOA to determine the adequacy of reserves for repairs and replacements. It also is strongly advised that buyers both review the insurance policies of the HOA to determine whether it is adequate to cover any and all risks of loss, and request information and documents regarding any past lawsuits or settlements pertaining to the common areas or physical condition of the property. And, finally, it is suggested that buyers review all minutes for the HOA that can be obtained from the seller, or otherwise, as they may provide information regarding the physical condition of the property or other matters of importance. Any questions concerning the aforementioned documents should be referred to a qualified real estate attorney. |