Homeowners' Association Disclosure
TLDR: In Virginia, you'll have three days after receiving the HOA documents to decide whether to proceed with the sale or terminate.
For a refresher on Homeowner's Associations, see Step 2: Homeowners' Association Disclosure.
This is one of the disclosures that comes down to personal preference; If you think the HOA Association rules are too restrictive, this is your chance to walk away.
In Virginia, buyers have three days after receipt of governing documents to review and decide whether or not to terminate the agreement. While that's not enough time to read a hundred or more pages of rules and restrictions given everything else buyers have on their minds (moving, obtaining financing, timelines, etc.), that's what is allotted.
If you'd like additional time to review the covenants, you can ask for more information prior to making an offer. Doing so will allow you to more carefully consider the pros and cons of joining that particular HOA instead of frantically skimming hundreds of pages of bylaws and covenants mere days before closing.
The HOA Transfer: What to Expect
What does the HOA transfer process look like in practice? Upon a signed agreement, the seller will notify the HOA of the pending sale and a representative from the HOA will send over the required documents at least three days before closing.
The HOA will also conduct an inspection on the property’s exterior to confirm there are no covenant violations. The transfer of ownership is their opportunity to diligently inspect the property, and they’ll usually have a laundry list of (sometimes expensive) repairs that need to be made in order to avoid any violations.
Keep in mind that the HOA inspection is only for the property’s exterior, so you won’t get any feedback on the interior condition like you will for a normal inspection.
Tip
Many Homeowner's Associations (HOAs) will inspect properties for violations before a sale, and will require those violations either be remedied by the seller or shortly after closing by the buyer. Like the home inspection, this is an opportunity to negotiate the documented issues.
If the seller has agreed to provide you with a credit for the repairs, be sure to actually use the cash for the intended remedies, or else you could be hit with some violation fees (or a lien!) by the HOA for non-compliance.
Storytime
“For years, our trash can was stored on the side of our house and shielded from view by a tree that was a mere two feet from the corner of the house. When we cut the tree down because of potential foundation issues, we received a notice letter from our HOA requiring the trash can be hidden from view of the street. In an effort to be good residents, we put up a lattice with some flowering vines to obscure the trash can, only to receive a second letter stating that we had erected an unapproved lattice in the front yard!”
What questions should I ask about the HOA?
If you haven’t already inquired, here are the questions you should ask pertaining to the HOA:
How much are the dues?
What do the dues include?
Is parking included? If yes, how many spots are available to you? Are they covered? Where will your guests park?
Are there any pet restrictions?
What amenities does the HOA offer?
Can I see the HOA bylaws and covenants?
Is satellite cable permitted? What about solar panels? (Some HOAs don’t permit them due to unsightliness)
Are there pre-existing agreements with utility companies that you must pay for?
Is the HOA involved in any ongoing legal battles?
At what point should I walk away?
This depends on your comfort level and willingness to comply with HOA rules. Most buyers are at least somewhat familiar with the purpose of an HOA. The more uniform and pristine a neighborhood is, the more strict (and expensive) the HOA is likely to be. Homeowners can typically expect a positive correlation between the HOA dues and the condition of the neighborhood.