I have a tip for condo sellers out there. As most of you may know, in the Commonwealth of Virginia (and in other states) the buyer must be allowed an opportunity to review the condo docs. From the time the condo docs are delivered, the buyer has 3 days to cancel the contract without cause, other than to say the condo docs contained information which caused the cancellation. The buyer doesn't have to explain why or what the problem was.
Recently a client of mine was buying a condo and when he received the documents, the condo docs said that the unit did not pass architectural review. The problem was that the client has made changes to his unit without first seeking permission of the association and then never had the changes inspected.
The change that the seller made? According to documents, the seller had installed an overhead microwave and changed a cabinet without seeking any approval from the association. This was indeed a minor change. Furthermore, the seller claimed that he didn't actually make the change. It was his claim that a previous owner made that change and that the seller had NEVER read his condo docs.
My client, the buyer, was a very above-board and by-the-book type of character. It was his position that if this guy "hid this fact" who knows how much else he withheld? Even if he believed the seller's story (he did not) then it would show that this is a very inattentive owner. My client canceled the contract based on condo docs.
At another location and with another buyer and seller, the property went under contract and the seller did not deliver the condo docs, because the seller didn't have condo docs. The seller didn't have the condo docs because the seller didn't order his condo docs. The selling agent explains that the law allows for 14 days for the delivery of condo docs. I replied, "That's why you order docs when you list." Because if you allow 14 days for preparation and 2 days for delivery and then 3 days for review, then the buyer can cancel the sale 22 days after the contract is signed.
Here are the lessons for sellers:
- Order you condo docs when you list your condo for sale.
- Review your condo docs to make sure that your condo doesn't have any defects according to the association.
- Have your agent deliver your condo docs PROMPTLY once your contract is ratified.
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About the Author --- Will Nesbitt is the principal broker of Condo 1 Alexandria / Will Nesbitt Realty LLC. Will specializes in condos, townhouses and single family residences in Alexandria, Arlington, Fairfax County, Crystal City, and Kingstowne. Will resides in Belle Haven Estates just outside Alexandria VA in Fairfax County. |
I can't tell you how many times agents tell me that their condo sellers don't have or can't find their docs. Instead of requesting them upfront, they wait until an offer is on the table. Are they afraid there is something in there to scare away a buyer?
The prices they charge for HOA and condo docs in my area is obscene but the law is the law. In Maryland we have seven days for review but no date for the docs to be delivered other that the restriction put on by the settlement date.
This is something that needs to be taken care of as soon as possible or the seller could have an unpleasant surprise. Thanks for the reminder.
Excellent advice Will! :)
Good post Will & thanks for the comment on the unit in Park Ridge.
I think more and more buyers are finding out afterwards about special assessments and HOA increases because they didn't read the minutes from the HOA either. Once you buy the unit is yours and it is your responsibility to check for these. If you don't ask, you may never receive.
And then there are the agents who are trying to convince buyers that the seller doesn't have to provide the condo docs if it is a foreclosure. Nope not true the lender still has to provide them to the buyer. It may not be true in other areas but in the Commonwealth of Virginia is is the LAW!
Good post Will!!! It's so important to have everything in order as a Listing Agent. Many don't and therefore may hinder the Seller's possibilities. As an Association employee, I have many prospective buyers asking me if I have condo docs (since the Seller doesn't). I tell the prospective buyer that a copy of the docs is $50.00 or they can find them on-line at the Clerk of Court's website and provide them the link. Up to now, they all opt for viewing them on-line.
Our condo association board recently voted to print a rules and regs booklet and to put in an inside pocket with a copy of the condo docs on a disc (including the rules and regs. (Although not a member of the board now, I am proud to say I voted for that one! LOL) So, everything is on a disc and the only thing we'd have to worry about are the recent financials for the complex. It was a minimal cost for the disc.
We found that people really needed the rules and regs in a hard copy, otherwise they'd never read them! LOL
The prices that are charged for the offering plan (prospectus) is obscene (sometimes up to $150.00) Total cash cow.
I must have touched a nerve with this one. I'm surprised to get so many responses!