No HOA letters: Proving your home is not part of a planned development

Date Published : Oct-12-2021

Written By : Kim Brown

Not everyone wants to belong to an HOA. While these planned communities offer members access to amenities, some landscaping or maintenance services and guidelines to help them maintain the value of their property, the rules and fees can be a turnoff for some homebuyers.

So, if you are in the process of selling your home to someone who wants to avoid HOA membership at all costs, how do you assure them that your home is not subject to an association’s rules and regulations?

        

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Providing a signed “no HOA letter”—also known as an affidavit—is one way to show that, you as a seller, are honest and forthcoming about the home. But buyers must beware. Just because a home isn’t currently part of an HOA, doesn’t mean it will remain independent of the planned development once it is sold. Read on to learn more.

        

Affidavits

An affidavit is a voluntary written statement that is sworn to be true. It is an oath from an individual who asserts that what they have said is the truth. An individual making an affidavit cannot be penalized for failing to include information that they were not aware of. Personal knowledge can, in some circumstances, include personal opinion as opposed to fact.

In order to be valid, an affidavit must be witnessed and signed by a person who has authority to administer oaths, such as a notary public or commissioner for oaths.

In court, an affidavit can be used as evidence.

        

Can anyone provide an affidavit?

Any person may offer an affidavit provided they have the mental capacity to understand the seriousness of what they are promising.

In certain circumstances, an affidavit can be offered on behalf of somebody else. For example, a guardian who cares for a sibling who is mentally ill may be able to submit an affidavit on their behalf.

        

Why are letters or affidavits used in HOAs?

There are a couple of significant reasons why affidavits are used in HOAs:

       

1. Affidavit of Awareness of Homeowners’ Association Regulation

Depending on where you live—and your HOA’s governing documents—you may be required to sign an affidavit if you are applying to renovate or add to your property.

The form would be obtained from the county’s building department, and would say something along the lines of:

“I acknowledge that I am a property owner in ____________ homeowners’ association controlled development, and as a property owner in the HOA, I may be subject to additional building, landscaping or other regulations. I further understand that the issuance of a building permit by the City of ___________, does not exempt me from any and all other regulations imposed by my HOA.“

This affidavit requires the owner to acknowledge that they must follow their HOA’s rules—as along with any additional rules imposed by the city or county—if they receive a permit to make the changes they’ve requested.

       

2. Affidavit provided by a seller

An affidavit of title is a document created by a seller, designed to protect the buyer who intends to purchase the property. The property may be a house, condominium, cottage or vacation home.

In this type of affidavit, the buyer makes several statements under oath.

These statements may include:

  • Confirmation that the seller is the owner of the property in question
  • Confirmation that the seller is not currently in bankruptcy proceedings
  • Confirmation that the seller is not also selling the property to another person
  • A detailed list of all liens and fees against the property, or confirmation that there are no liens on the property
  • Confirmation that the property does or does not belong to an HOA

With few exceptions, only the owner of the property can sell their property. Confirmation of ownership provides the buyer with assurance that the seller is the true owner, and that they are the only owner.

Similarly, this document can help put an apprehensive buyer’s concerns to rest if they have expressed a need to remain independent of HOAs.

       

Why would a buyer need to see a no HOA letter?

A home that already belongs to an HOA cannot opt out of the association after the fact. However, there are rare situations where an HOA is formed after homes are built. In these cases, the owners can decide not to be a part of the association. 

But, the association’s CC&Rs may include a provision stating that once any households that have chosen to opt-out of the association are sold, the new owners will be required to join the HOA. If this is the case, this information should absolutely be included in the affidavit.

In other cases, a community with a voluntary HOA will move towards becoming a mandatory HOA community. This decision is usually made due to dwindling finances or low community member participation. In these situations, homeowners do not need to join.

A prospective buyer would request this type of document if they have reason to suspect that the home that they are interested in purchasing belongs to an HOA community. 

       

Would a current owner be unaware that they are part of an HOA?

It is highly unlikely that a current owner would be unaware that they are part of an HOA. The association would charge them fees, send them invoices and notices, and continue to take steps to collect those fees if the owner had not paid. 

The buyer would have also received an addendum or disclosure resale package before finalizing the deal. These documents would have made it very clear that their home belonged to an HOA.

The resale package or addendum addresses governing documents, financial information pertaining to the association, and, depending on the document, current dues. Addendums also clarify who will pay the transfer fee or other fees charged by the HOA at the close of escrow.

       

Buyers should still take precautions

Are you a buyer who is eyeing a home that is in the middle of a planned development? If so, you should ask your own questions and speak with professionals in addition to obtaining a no HOA letter from the current owner.

Consult with a title company – they will do research on the property and help you get the answers you need. You can also speak with a local realtor, or reach out to the HOA yourself.

It’s also wise to hire an attorney who is familiar with HOA law. They can guide and protect you through this process.

       

Conclusion

No HOA letters, also known as affidavits, are not letters to protest the formation of an HOA. Rather, they are a promise from an owner that their property does not currently belong to an HOA. The owner is stating that they are not obliged to follow the governing documents of the planned development, or pay regular dues to the association.

Just because a property does not currently belong to an HOA does not mean it will stay that way indefinitely. It is possible for an owner to opt-out of an HOA if it was formed retroactively. However, the association may have a rule in place that would require the home to become a part of the community once it is sold.

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