I want to start today's post by saying that it inspired by Ken Harney's recent article in the Saturday Real Estate Section of The Washington Post. He regularly has articles published in their Saturday Real Estate Section. This article by Ken targets people who may purchase homes in communities that are governed by associations---they have a board and bylaws. This is most often found in condominium, cooperative and Townhome communities. There are also communities that have single homes with a homeowner's association, subject to community rules.
Currently, the sales contract says that buyers have the right and entitlement to receive the association documents. So a seller cannot decline to give them to you. A buyer must receive the documents no later than 10 business days after a contract is ratified (is fully signed in agreement of terms), otherwise a buyer can back out of the contract by giving the seller notice of voiding the contract prior to receiving the documents. However, make sure it is clear whether or not the sellers or buyers in your jurisdiction customarily pay for buyers to receive a copy of the documents or if this is something that needs to be negotiated in the offer. ask your realtor and or real estate attorney.
Once a home buyer's offer on a home gets accepted, he/she have to take care of a number of matters which may have contingency time periods by which they need to be completed and so buyers prioritize what needs to be accomplished when and if there are things they don't have to worry so much about. One of the things that a number of buyers make less of a priority is the contingency related to review of association documents/condominium documents/h.o.a. documents (or however they may be called/referred to in your jurisdiction). These documents contain vital information, which a number of people are negligent about reviewing before the purchase is complete. The question is whether the buyers overlook the documents because they are overwhelmed with everything else that needs to be taken care of during the contract period or they just can't image how 'serious' the documents might be and how they might impact the buyer's decision whether or not to go through with the home purchase.
As Ken points out in the article, the biggest challenge of the association documents is how you thick/dense they are and how short the contingency period is, considering how detailed the documents are and considering everything else you have to take care o during the contract period.
For Washington, DC, the contract states that currently, the review period for association documents is 3 business days --- this is for condominiums, coops and H.O.A.'s. Business days are defined as M-F, excluding federal holidays.
For Maryland, the review period for association documents is currently 7 days for condominium documents, 3 business days for coop documents and 5 days for H.O.A. documents.
The GCAAR Sales Contract, which is often used in Montgomery County, MD and almost always in Washington, DC (there may be a few exceptions) currently defines days as calendar days, which would include every day, including the weekends and defines business days as Monday through Friday, excluding holidays.
THE MAR Sales Contract, used exclusively in Maryland, currently defines days as including the weekends and holidays, whether state, federal or religious. It doesn't spell out business days, but one can talk with his or her real estate attorney,agent about that if the regular day contingency period doesn't work for him/her.
In his article, Ken suggests that if you think the contingency period for reviewing the association documents gives you enough time to actually review the documents, then you should consider slashing the number of days for the contingency period and write in a new number, proposing adding a few more days to the contingency, giving you a little more time for due diligence in reviewing the documents. I think this is a wonderful idea, however, I would only caution against doing this if the home is fairly new to the market and the seller is expecting multiple offers on his/her home. Altering something in the contract to give the buyer's 'an advantage' could make other buyers' offers look more attractive in a multiple offer situation. If the home has been on the market for a little while and it seems like there are no other offers being presented, then I would consider asking the seller about additional time for reviewing the association documents. Every real estate market is different and every jurisdiction has its rules, regulations. So follow your real estate attorney and realtor's advise. I defer to them.
Remember, any time you or someone you know is thinking about moving, has a real estate question or wants to talk about the market, I always have time for you referrals. Thank you.
Life is good!
Licensed in MD & DC
RE/MAX Realty Group
information deemed to be accurate but not guaranteed