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March 21, 2005
The One Law That IS Needed.
It seems that every day, one state legislative body or another is rushing to enact laws that are supposed to protect the homeowner in an association, or to correct the "abuses of the Board". The pros and cons of the various laws will be debated on both the floors of the legislatures and in the blogs of interested writers. There is one law that most states don't have that would be a help.
That law would require that associations provide purchasers with specific information prior to closing and that the purchaser sign a document stating that the documents have been received and that they agree to abide by them. What documents would they need? A current budget, the last independently reviewed financial statement, CC&R's (or Master Deed and Bylaws), rules, reserve study, current reserve status, minutes of the last annual meeting, and a statement from the board that no special or additional assessments have or are being considered. With this information, a buyer can make an informed decision about the condition of the association. It also removes a the standard "I didn't know" excuse when a new owner puts the motor home up on blocks on the street in front of their house.
Who would object to helping consumers make informed decisions? Well, real estate agents and mortgage bankers might, as they, as a rule, dislike anything that might upset a sale or closing. They have pretty powerful lobbies at most state houses, but sometimes logic prevails. If your legislature is considering changes to its condo or HOA acts, why not ask them to include something that might actually help both the associations and the new owner.
Posted by joewest at March 21, 2005 1:44 AM