HOA – Homeowner’s Association / CIC – Common Interest Community

Why does a Seller need to provide a HOA Resale Package?  The short answer…it’s the LAW (my disclaimer…I am NOT an attorney nor do I play one of TV…I AM a real estate agent).

Why does a Buyer need to review a HOA Resale Package? The short answer…so the buyer can enjoy their property within the rules and regulations of the community.

Here are the LOOOOOONNNNNNGGGGGG Answers:

Communities have rules and regulations…you need to know what those are so that you, as a homeowner in that community can enjoy your home while abiding by the communities’ standards (AKA RULES).  If you’re an investor, you’re going to want to know if the community in which you are purchasing, allows renters. That information will be in your CIC Resale Package.  If you’re a buyer and are hoping to build a rooftop balcony on your new home, you are going to want to know if that’s even allowed…answers or hints to the answer to that question should be in the CIC Resale Package.  There are many other things addressed in the Resale Package, including times and access and rules for community pool and clubhouse, if one is available. Also, this package generally addresses the rules on how the front yard is to be maintained in that community and/or parking restrictions, or how guests driving above the speed limit affect violations against your home, etc.  Plus, you want to know if the properties in the community are under any legal trouble for possible construction defects…that’s in there too.  There are SO many reasons why this package is important!

Why am I even talking about this?

Well, because this week, a buyer’s agent told me that he checked off the "waived" box in an Residential Purchase Agreement for the purchase of one of my listings by his buyer and informed me that he wanted to save the seller some money so the buyer could get a better price on the property. Clearly, I stated that that wasn't an option and the seller was going to provide the buyer with a HOA Resale Package and it was SUPER important that a buyer receives one for ANY/ALL purchases of property in a common interest community.

Nevada Law (NRS 116.4109 and 116.41095) require certain documents and a certificate (collectively, the "resale package") to be provided to prospective purchasers of property within a Common Interest Community (the "Association").  Where can you find these?  Here, of course…and Here.

The seller cannot require the buyer to get his/her own resale package. The law requires a unit owner or his authorized agent to furnish the purchaser with a resale package obtained from the HOA. See NRS 116.4109. NRS 116 does not provide that buyers can waive this requirement. Instead, NRS116.1104 states, “except as expressly provided in this chapter, its provisions may not be varied by agreement, and rights conferred by it may not be waived.”   However, the parties may agree (in writing, of course) for the buyer to reimburse the cost of the package at close of escrow.

What does a resale package include…here’s a list:

  • Declaration of Restrictions (CCR’s)
  • Association Bylaws
  • Rules and Regulations of the Association
  • Info Statement (described above)
  • Statement of Monthly Assessments for Common Expenses and Unpaid Assessments
  • Current Operating Budget
  • Current Financial Statement of the Association, Including a Summary of the Reserves Study
  • Statement of any Unsatisfied Judgments & the Status of Any Pending Legal Action Against the Association or Relating to the CIC of Which the Seller Has Actual Knowledge
  • Statement of Any Transfer Fees, Transaction Fees or Any Other Fees Associated With the Resale of the Unit
  • Statement Describing All Current & Expected Fees or Charges for Each Unit, Including Late Charges, Penalties, Interest, Etc.

As a potential homeowner, you will receive a disclosure which itemizes your rights and responsibilities of owning a home in the HOA / CIC.  This is generally provided to you by your agent when you sign your residential purchase agreement and it states that:

  • You generally have 5 days to cancel the purchase agreement if you do not agree to the deed restrictions (once you receive the CIC Resale Package)
  • You agree to restrictions on how you may use your (almost) property
  • You have to pay assessments (also known as HOA dues) for as long as you own the property in the community
  • If you fail to pay those assessments, the HOA can foreclose on your property and it’s happening more often than ever before)
  • You may become a member of your HOA board
  • You are required to provide prospective purchasers HOA information just as the seller of the property has provided one to you
  • You still have certain rights – guaranteed by the state – regarding ownership

Remember that some homes have two or maybe even three HOA’s…you need to know the rules and regulations for all of them so that you, as the new homeowner, can truly enjoy your property.

If you or anyone you know is considering buying or selling a home or needs a property manager, contact me today and I will be happy to assist.