In BC you have to disclose 2 years worth of council meeting minutes.

Here it is buyers beware. I sell a lot of condos and tend to know what is going on,but make sure to tell my clients , I know a lot but not everything. I usually write in the contract that pending assessments but you never know about the future. I tell them to look at the total complex, its condition, its reserves, and that condo fees generally go up.

Tim you are right.  It is our job to do the research and gather info for our clients.  Too many agents could care less though.   Nice Post.

Thanks for the post. I'll have to definitely consider this when I start looking...

Tim - I sell alot of condos, and I routinely put wording into the contract that buyers are to be provided all governing documents including but not limited to condo docs, rules & regs, bylaws, any and all amendments, the last 2 years of annual meeting minutes, the last years' worth of monthly meeting minutes, the last 2 years of approved budgets and financial statements.  Any votes on assessments, up or down, are reflected in those minutes.  No one can know what associations might do in the future, but those minutes will certainly give a heads-up on what the discussions have been on things like that.

Ann

Tim-  I would have to wonder why each unit would have to pay so much for the siding issue...I can do an entire house for less than that.  Something smells bad...Those homeowners need to get some quotes on their own to confirm that it would cost that much.

The management group should check into financing repairs so that it doesn't cost the homeowners so much in one lump sum like that.

Great Post !  I didn't realize that the assessments could be so high !! 

Ann, those are really good stipulations you use. After seeing what could happen, I could see that they are really needed. 

Lauren, I thought the price was crazy also.  But they did a major study and bid it out and that's what they came up with.  They tried to get a group loan but for some reason couldn't.

good advice; as a buyers agent we have the responsiblity of performing due diligence on behalf of our buyer client.  

Great advice Tim...I usually do just  like Ann stated ...in fact our P&S agreement has a clause right in it for condo documentation.

I have listed and sold a couple in the last few months and it's surprising how hard it is to get those minutes.  The owners don't save them and the management companies drag their feet to get us copies.  In our P&S, they must be supplied with 5 days of contract and it's always a struggle.

Rick, I'm sure it's a real struggle when there was talk or votes on big assessments.  I hate regulations, but I think it might be necessary to motivate people to not drag their feet.

I had a listing that had a special assessment for roofing.  It was a hard sell.

This is a great post -- In NH we have a statute that gives the consumer the right to receive important information from the homeowners' association - including the budget etc.  However, as you point out, it may be difficult to find out further information.   I always add a contingency requesting additional documentation to the list of the items provided for by the statute  and give the buyer time to review the documentation and give notice whether or not the client want to go forward-- Most importantly, I request the minutes for the last 2 years and the annual meeting minutes for the past 2 years.  I also recommend that my clients call the president or another office of the association -- or perhaps the management company and ask about "potential" assessments - and/or other problems -- If the market will allow it, I have my clients make a visit to the condo and talk with some of the owners - or look up the names of the owners and have the buyers interview some of the owners by phone --  We find out a lot of great information.  The problem has often been with seller's agents putting up roadblocks and advising the seller not to provide documents requested. 

Good points, Tim. Like Ann, I have always made it a point with buyers of a condo to include the minutes from at least the last year (plus budget, by-laws, etc.) and all other pertinent docs as part of the offer contingencies. No guarantees, of course, but it has helped. We get docs here in CA directly from the HOA.

Jeff

Our attorneys have advised us not to touch the HOA documents, to have a clear path from the management company or board to escrow and from escrow to the buyer directly.  The reasoning behind this is sound.  The documents cannot be tampered with, will not be stale and the liability is removed.  If you accept documents from the seller and turn them over to the buyer they may not be the most current docs.  If a major decision has been made since that time like no more pets in the building and your buyer has a pet, it could be a huge problem. 

I always give the buyers agent the phone numbers of the board members and advise them to call and ask any questions they like.  I want them and the buyer to be comfortable with the purchase.

If there are any upcoming assessments my sellers are advised prior to listing that these will need to be resolved prior to the close of escrow. 

Disclose, Disclose, Disclose, because disclosure will set you free.

Good advice, I too find it hard to get relevant info from management company and the sellers usally can't find  documents.

Tim,

Thanks for the post. I also agree with Ann's approach. I do not handle many condos/coops. However, when I do, I ask that the buyer's attorney request information on the number of owners in arrears with their association dues as well as, the amount. Because at some point the obligation gets redistributed and the new owner could find themselves with a much larger monthly bill.

Great post Tim.  Another reason why a buyer should work with a REALTOR and one who works that particular niche.  Even an otherwise good agent can miss something like this.  Thanks!

Thanks for all the good suggestions.  I'm surprised that so many ask for the HOA minutes.  We always ask for all the other things but I have never ever had an agent request the minutes to the HOA meetings.  I can see first hand why these are so important.

Maggie, you are so right about the importance of really knowing a particular niche. If you don't do condos much it is so easy to forget about some things.

I think Laurie has got it right.  I do business in downtown Chicago where a good portion of our volume is condos.  Our Association of Realtors has a Rider that asks for everything but the age of the kitchen sink.  Give all the information to the prospective Buyer and allow them to do the due diligence in their purchase.  In information, I mean: Condo management phone numbers, Board members numbers, or even better have their attorney due the work.  In Illinois, we as agents have little to do with the Title Company and Attorney's are a part of 99% of our transactions.

Tim Mertzlufft

http://www.openingdoorschicago.com/

Yes, those assessment can really be an issue in the buying/selling process.  I saw more special assessments last year than ever.  My Marriott timeshare even passed one on to the owenrs.  The best advice is to become involved in the management of your condo.  I feel that one of the condos I presently own out of state is governed by folks that have little regard for costs being passed to owenrs.  When I bought it, my regime fee was $434 a month and 2 years later it is now up to $600.  Where do you go from there?

yup, very true we are seeing the same thing here at the beach..Unreal     

Tim,

 I sell a lot of condos and as noted by Jeff Dowler we get docs directly from HOA in CA and while they are slow it does seem to work along with copies of HOA minutes for last 12-18 months.. I tell my sellers  they must have this stuff  when we list... as to your comment about a pending assessment...Good for you about disclosing a possible pending assessment..You were doing the right thing...   if it is being  discussed it needs to be disclosed....not disclosing items like this is what leads to lawsuits later and  gives agents a bad reputation for not being honest..

Kaye, the problem comes when the seller doesn't want to disclose, the law says you don't have to disclose, and you feel awful that the buyer isn't aware of such an important item. 

With an agency relationship wouldn't I be wrong to go ahead and disclose it when the seller doesn't want to?  That's why I think it needs to be in the law.

In Washington State, it is required that pending and on-going assessments are disclosed by the seller so if you live in a state that doesn't have those requirements in the listing agreement and the purchase and sale, you may want to notify your local multiple listing service and board that such disclosures should become mandatory.

Sounds like a condo assn with inadequate reserves.  THAT should be a red flag when selling those things.  I wouldn't sell them.

Lenn, Homefinders.com

Tim,

Don't know about where you are at but here the agent must disclose any pertinent information that may affect the sale.. if I had that type of information and didn't disclose it I could be sued and found liable.

I always tell my sellers that they can never disclose too much but they can disclose too little which is what will put them in court.  Most of them get it...

Thanks for the advice Tom, I like the idea of the HOA minutes from the past year being available to the buyer to review that way they know if any special assesments have been discussed re:  siding etc...

I found this thread through a Google Search. It directly relates to an experience I had in CA. I recently sued my seller for non-disclosure of material facts regarding talk and voting of a major siding assessment. I prevailed! About 6 months after I purchased my condo, the HOA scheduled several meetings regarding issues they've been experiencing with the Siding for many years. Many units had rotted trim and siding areas: some had new leaks around the windows.  The assessment turned out to be $32k (per Unit X 12), which is very realistic for a new exterior siding project, especially in CA. The HOA also voted that new windows are mandatory, since the siding was being redone and it proved to be cost effective at that time. 

When representing condo buyers I ask for 1 years worth of minutes and the financials along with the CC&R's, I am in California.  A couple of years ago the attorney for the brokerage advised all of the company Realtors not to touch the CC&R's or any other paperwork being transferred from any Condo Board or Management company; to make certain that there was a clear path of untainted documents.  He further advised not to accept any paperwork directly from the seller or any other party as it may not be the most current and could be tainted.  

Since that time all paperwork goes directly to Escrow and then directly to the buyer.  I advise my buyers to bring the paperwork to me to review with them, my buyers are also advised that they must read and understand everything included in that paperwork and the importance of it. I have not had any problems thus far. 

Enrique- Thanks for your story.  It's pretty scary what can be hiding beneath the surface.  I'm always very nervous about this stuff when I'm helping a buyer to buy a condo.

Laurie- Great advice.

Wow!  I live in the Pacific Northwest, specifically Vancouver, Canada, and own my condo.  Condominiums here are governed by the BC (British Columbia) Strata Act (see link below), and althoug cumbersome it severs it's purpose.   Having said that, I'm shocked at how difficult it is in your state to get disclosure or access to minutes.  Here it's considered a standard subject to an offer to request and receive two years of strata minutes.  As an owner I receive copies of every meeting that takes place, and if I choose not to keep them (which is recommended in case I sell and they're requested by a buyer) I can always order a set for a standard $100 fee.  We also are required to do a disclosure on significant issues.  For instance in our building we need a re-piping job, due to the age of the building.  The special assessment has been voted down twice now by the owners, but the condition of the pipes would need to be disclosed to future owners...in this case they would be expected tp do due dilegence though, which translates into requesting the minutes.  As an example, recently someone had purchased a unit our complex, but had not requested the minutes, and as a consequence did not realize that significant work needs to be done...so sad, to bad!

 FYI, here's the link to the strata act  http://www.qp.gov.bc.ca/statreg/stat/S/98043_01.htm

Sorry, my fingers are not typing well today... in me previous posting severs it's purpose should read serves it's purpose.  Just one other thing: I'm not sure about Washington State, but because of the deteriorating building codes in British Columbia, our biggest challenge has been leaky condos.  This is something that is the norm in buildings built between 1984 and the late 1990s.  People have gone bankrupt, and literally lost everything they owned over this, regardless of their socio-economic background.  Those who decided to try and stick it out have been faced with special assessments upwards of $100,000. It's one of those things that's left a bad taste with many people here.

I specialize in the Los Angeles Condo Market and I always ensure my clients read and understand the Homeowner Association's CC&R's, Rules & Regulations, Bylaws, Minutes of Meetings, Financial Statements, as well as a current Reserve Study of the building.

A lot of agents do not even encourage their clients to read the Reserve Study - but by doing so, unexpected or surprise assessments can be avoided.