by Richard Shafritz & Doug Dean
Planned Unit Developments
So many of our communities are Planned Unit Developments and the condos, townhomes and even fee simple have mandatory associations! We pay a price for all regulation and with these properties the price is freedom. We have to make sure the communities we purchase in allow us to live the lives we wish to live. For example – Is it me, or does everyone all of a sudden want chickens – for eggs, for meat and even for pets. But before you get to excited because the City /County your buying in allows them, make sure the association does too! Otherwise, you’re dream of chickens could be cooked before the first egg is hatched (the metaphor is scrambled but you get the idea).
But so often lately, the big pinch is on rental restrictions. Please consult with the association directly before assuming (now that you have read the 4 Agreements of course you’ll never assume) you can rent the property in general or that the maximum rental capacity has not been met.
Just last week, we got to closing and a realtor representing a buyer assumed that the property had no rental restrictions because it was near a similar community and appeared to have the same architecture. Fortunately the saving grace was that the listing agent was aware that the buyer wanted to rent and had already confirmed there were no restrictions.
Mandatory COAs or HOAs
The last point on HOA/COA is as the saying goes – “Freedom isn’t Free” and neither are Mandatory COAs or HOAs. They are downright expensive at times and we often find ourselves in a “tug-of-war” with the appropriate party to pay for the letter required to close your transactions. Don’t let this happen for a number of reasons – 1. if your client is waiting, the fees get much higher as we get much closer to the closing date. It’s not uncommon for us to see a $100 letter become a $300 letter as we go from 14 days or more to a “super rush fee” of 3 days or less. 2. If we wait, we run the risk of discovering a fee which is a surprise to either party, and 3. Waiting can delay a closing – something we all fight to avoid.
So encourage your clients to cooperate so the closing attorneys and staff may ensure the letters are ordered to minimize costs, surprises and delays!
Of course if you want that chicken, another option is to avoid the COA/HOA in the first place… but be careful the county or city may have something to say and don’t even get me started about roosters…