For all the excitement people have related to buying a house, forthcoming homeowner’s association (HOA) fees can be a big damper to the process if buyers and sellers aren’t careful.
On this latest episode of “You Have Real Estate” with Attorney Justin Clark, Orlando-area Realtors Holly Kroll and Jay Heckendorn-Telenda discuss what people should know about homeowner’s association fees.
Here were three key questions that were addressed.
1. What is an estoppel letter?
An estoppel letter is a document from a homeowner’s association outlining various fees and balances, and whether there is a singular HOA or multiple HOA’s governing a property.
“The estoppel is a full disclosure of everything,” Heckendorn-Telenda said.
2. Can not having an estoppel letter affect transactions?
Yes, it can. Having any fees from HOAs up-front before closing is essential.
Both Kroll and Heckendorn-Telenda have seen instances in which deals are held up at the last minute because of fees that weren’t disclosed up front, which sends not only buyers and sellers scrambling, but also title and insurance companies.
“They always tell us Realtors to make sure there is a form that is supposed to be attached and signed that is done,” Kroll said. “That information needs to be out there (or else) it could kill a deal.”
3. Is there any way to not have homeowner’s association fees?
An HOA can sue an owner for not paying fees, so the best way to avoid paying fees is to buy a property that’s not attached to an HOA.
However, that can greatly limit a search for a property, although Kroll said more and more people are attempting that route.
“Probably more often than I’ve ever seen,” Kroll said. “We are getting so many people from up north who aren’t used to HOAs. You even mention it and it’s a foreign entity to them.”
For more information, watch the video above.