New Law Regarding HOA Documents (AB 771) may have saved us $1,500.00 and maybe my short sale transaction!
My law school studies are certainly keeping me on my toes. Having to do legal research is something that I can almost do in my sleep!
I have a short sale that I've been hired to facilitate, and things have gone well. I was able to get the short sale written approval in 34 days after the purchase agreement was signed between buyer and seller.
Things are/were going great.
Then the attempted hijacking happened.
This is for a very nice condominium that is selling for just under $500,000. The cost of the HOA docs from the HOA is $495.00.
Oh, but wait, the HOA sent my escrow officer a statement showing that there are approximatley $1,500 in "fees" that go along with that in addition to the $495.00.
What?!! There is NO way the bank is going to pay for that and we can't work that into the HUD, NO WAY!
Well, in my opinion, this is nothing but extortion, so I did some research and found that there was a new law just passed on January 1st of this year that makes this practice illegal. It is Assembly Bill 771.
-- AB 771, a C.A.R.-sponsored bill, which requires a homeowner association (HOA), upon written request, to give an estimate of the fee for providing a prospective buyer with the governing documents of the common interest development and other required HOA disclosures. The bill also specifies that only fees for the required documents may be charged when such documents are provided, effectively prohibiting any “bundling” of fees for other documents with these fees. In compliance with the bill, C.A.R. has released a revised C.A.R. standard form (Homeowner Association Information Request) detailing which documents are required, and requiring the provider to disclose the fees that will be charged for the documents before they are provided. The seller of a CID must complete this form and transmit it to the prospective purchaser along with the required documents. This will eliminate any uncertainty for the prospective purchaser as to exactly which documents are being provided and the precise fees being charged for those documents.
We will be presenting the HOA with this new law and hopefully they will comply and adjust their demand for an additional $1,500 in fees (that is just outrageous!)
If you'd like to read the bill in it's entirety, you can do so by clicking here:
By the way, I have a great new group here on ActiveRain that examines both actual and hypothetical legal issues each week in a fun "What-If" scenario. If you'd like to join the group and participate, you can click on the group below. Some GREAT discussions going on here and a really good way to keep your real estate legal chops up!