Can An HOA Prevent Me From Selling My House?
If you're a homeowner who's part of a homeowners association, you might be wondering about the extent of the HOA's power when it comes to selling property.
The good news is that HOAs usually can't stop you from selling your house.
However, there can be a few bumps in the road.
In this post, I'll explain what the HOA can do, and go over some of their other rules when it comes to selling your home.
Can An HOA Prevent You From Selling Your House?
The simple answer is no. A HOA can’t directly stop you from selling your house.
But they can put conditions and restrictions in place that might make selling a bit more complicated and slower.
Let me explain some of these situations:
Outstanding Dues Or Fines
The most common thing that complicates a sale is unpaid dues or fines to your HOA.
If you owe money to your HOA, they may place a lien on your property. A lien essentially means they have a claim on your home until you settle up.
Also Read: Selling A House With A Tax Lien
This can stop the sale from going through until you pay off those outstanding amounts.
So just stay on top of your financial responsibilities to the HOA.
The last thing you want is a lien getting in the way, so before listing, make sure to check with the HOA and clear up any unpaid dues or fines.
HOA Violations
Most HOAs have a set of rules and agreements that homeowners are expected to follow.
If your house is in violation of HOA rules, the HOA may prevent the sale from closing until the violations are fixed.
This could be things like not having the right landscaping, paint colors, or any changes you’ve made to the house that weren’t approved.
If you have any outstanding violations, just fix them.
But this could mean spending money to get your house up to their standards.
HOA Approval Process
In some rare cases, HOAs in certain states (like Florida) may have bylaws allowing them to approve or deny potential buyers.
However, they cannot discriminate based on factors like race, religion, or familial status.
The buyer has to fill out an application and meet certain criteria before the HOA gives the okay. This can slow down the sale a lot.
It might even turn off some buyers who don’t want the extra hassle.
Other HOA Rules & Regulations For Selling
Besides the issues above, HOAs can have other rules that might affect selling your house.
Let me go over these to help you get ready and make the process smoother:
Transfer Fees
Many HOAs charge a transfer fee or move-out fee when a property is sold.
These fees are typically used to cover administrative costs of updating their records with the new owner or fund community projects.
HOA transfer fees generally range from $100 to $500.
So make sure to budget for these extra costs.
Disclosure Requirements
Most HOAs require sellers to give buyers specific disclosures about the community.
These might include the HOA’s rules, fees, financial statements, meeting minutes, and info about any ongoing or upcoming projects and assessments.
Also Read: can you sell property while in jail?
Giving these documents is not only a legal requirement but also helps build trust.
If you don’t give these papers on time, it can slow down or even stop the sale.
Rental Restrictions
Some HOAs have rules that restrict or prohibit renting out properties within the community.
If you plan to sell your home to an investor or someone who intends to rent it out, you need to know if your HOA has rental restrictions.
Some HOAs limit how many homes can be rented at once or have rules about lease terms and tenant screening.
These restrictions can affect how many people are interested in buying your house too.
They have these in place to maintain the character of the neighborhood and prevent it from becoming overrun with rental properties.
Also Read: Distressed homes impact on values
So if you're selling to a potential landlord, double-check the HOA's stance on rentals.
Working With Your HOA
To make the sale go smoothly, it’s a good idea to stay in touch with your HOA from the start.
Let them know you plan to sell and ask for a list of any rules or fees that might apply. And take care of any unpaid dues or violations as soon as you can.
And always maintain a professional and respectful relationship with the HOA board.
Doing all this will avoid potential problems and make the sale process easier.
FAQs
HOA Fees When Selling A House
You only have to pay an HOA transfer fee when you sell your house. If there are any outstanding HOA dues or fines, you have to pay them too.
Can An HOA Take Your House If You Own It?
An HOA cannot directly take your house away from you simply because you own it, but they can foreclose on your house.
If you consistently neglect to pay your HOA dues or fines, the HOA can place a lien on your property. If the HOA lien remains unpaid, they may initiate a foreclosure process to recoup the owed amount.
This process goes through the court system, and if a judge rules in the HOA's favor, the house could be sold at a public auction to pay off the debt.