The HOA docs dilemma: In California, once a buyer's offer is accepted, the parties enter into a standard C.A.R. Residential Purchase Agreement whereby HOA docs are (contractually) required to be "ordered" within 3 days (by default - can be changed) and delivered to buyer's within 7 days. However.... HOA's charge a fee for thisand most escrow companies simply wait until near the end of escrow (to make sure everything else is on track to close) before ordering HOA docs, paying for this out of their funds, and charging seller. Consequently, buyers do not get these contractually required HOA disclosures and reports until way beyond the 7 day time period allowed for in the purchase agreement and often do not have enough time to thoroughly review HOA docs prior to the scheduled close date.
A few escrow companies (actually only one that I know of in this area) will go ahead and fund this cost up front using their funds, in order to meet the contractual time lines. However, most escrow companies prefer to not bear the risk if escrow ends up not closing.
I was discussing this with one of my favorite escrow officers, Judy Stinson at Pacific Coast Escrow, the other day while opening escrow on a deal, and she suggested that Sellers pre-pay this up front so they can go ahead and get HOA docs ordered and delivered within the contractual time lines. What a simple and brilliant idea! Even if the deal does not close escrow, sellers can in most cases still use the HOA docs (paid for up front) for the next offer accepted. Buyers get these important disclosures and documents within the 7 day time period and have the normal 10 days to review.
Buyer's review of important HOA documents should not have to wait until near close of escrow. Buyers need to be aware of potential HOA issues that may affect them as new property owners.
I told Judy that from now on, I am going to make it a condition of the offer that sellers pre-fund this cost up front, at least within 3 days of opening escrow. Of course, they can always say no, in which case we will need to find a plan B, however I think this is a great solution to the HOA docs dilemma.
If anyone has any other "solutions" to this common problem here in CA, that they have found helpful, I would greatly appreciate hearing from you. Thanks!
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