Homeowners’ Association Disclosure
TLDR: The HOA disclosure is legally required in the state of Virginia, giving buyers at least three days to review the Association Disclosure Packet.
Homeowners’ Associations can be complicated entities with strict rules. While these organizations tend to keep neighborhoods looking spiffy, they can also be a homeowner's worst nightmare if you're not fond of regular checkups on your property. Because of the legalese and often verbose covenants of many associations, some states require that buyers be given the option to walk away from buying a house that is part of an HOA before closing.
In Virginia, buyers are afforded three days to review governing documents before being given the option to terminate the agreement. While that's not enough time to read a hundreds of pages of rules and restrictions given everything else buyers have on their minds (moving, obtaining financing, timelines, etc.), that's what the industry standard is.
However, you can ask for HOA documents before making an offer. Doing so will allow you to more carefully consider the pros and cons of joining an HOA instead of frantically skimming hundreds of pages of bylaws and covenants mere days before closing.
Storytime
“For years, our trash can was stored on the side of our house and shielded from view by a tree that was a mere two feet from the corner of the house. When we cut the tree down because of potential foundation issues, we received a notice letter from our HOA requiring the trash can be hidden from view of the street. In an effort to be good residents, we put up a lattice with some flowering vines to obscure the trash can, only to receive a second letter stating that we had erected an unapproved lattice in the front yard!”
What questions should I ask about the HOA?
How much are the dues?
What do the dues include?
Is parking included? If yes, how many spots are available to you? Are they covered? Where will your guests park?
What amenities does the HOA offer?
Are there any pet restrictions?
Can I see the HOA bylaws and covenants?
Is satellite cable permitted? What about solar panels? (Some HOAs don’t permit them due to unsightliness)
Are there pre-existing agreements with utility companies that you must pay for?
Is the HOA involved in any ongoing legal battles?
At what point should I walk away?
As with many of the other disclosures and contingencies, this depends on your comfort level and willingness to comply with HOA rules. Most buyers are at least somewhat familiar with the purpose of an HOA. The more uniform and pristine a neighborhood is, the more strict (and expensive) the HOA is likely to be. Homeowners can typically expect a positive correlation between the HOA dues and the condition of the neighborhood.
Tip
Many Homeowner's Associations (HOAs) will inspect properties for violations before a sale, and will require any violations either be remedied by the seller or shortly after closing by the buyer. If the seller has agreed to provide you with a credit for the repairs, be sure to actually use the cash for the intended remedies, or else you could be hit with some violation fees by the HOA for non-compliance.