In Virginia, a purchaser of a home in a condominium or a homeowner association has a right to review certain documents regarding the home they are purchasing prior to going to settlement. They also have a right to cancel the contract within a given time frame if those documents are not satisfactory to them. The document package typically will include the rules and regulations of the association, status of the reserve funds, the budget, outstanding fees, violations for the property, pending lawsuits as well as the recent minutes of the association.
It is very important that you receive this information (often called the “resale package”) and that you review it thoroughly. If you have any concerns or objections your time to act is very limited. Associations do from time to time have legal issues or are in financial trouble. You may think twice about purchasing in a community where there are large association fee increases or special assessments planned. Also, there may be limits on renting out a unit, the number and types of pets, limits to the use as no pianos, water beds and so on.
There are many details surrounding the resale disclosure that purchasers are unaware or confused about. For example, the time limit you have to review the documents is affected by when and how the resale package is received. Also, does your real estate agent receiving the documents “start the clock” on the review period right away? And, what if the sellers want you to waive your right to review the resale documents – can they do that? Lastly, what if you just have cold feet and want to walk away from the transaction altogether? Can you use the resale document review period as an excuse if it is still available?
The answers are in the video courtesy the Virginia Association of Realtors.