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The Virginia Property Owners Association Act and the
Virginia Condominium Act were enacted requiring disclosure of association
information. Several people are responsible for making sure a home
sale complies with that law. They are the real estate agents, attorneys
and the seller.
Under the act, a community association has 14 days to provide a
disclosure packet from the time the request is received with a check.
Thus, a seller or his agent must ask the association for the packet
as soon as the contract is signed. After receiving the information
on dues, rules and other matters, the buyer has three days to decide
whether to cancel the contract based on information contained in
the packet. When the packet is requested at the last minute, there
is no real opportunity to review the information, so the purpose
of disclosure is defeated or the seller is put at a great disadvantage.
As a result of such delay, the buyer is often committed to going
through with the deal, even if he or she may be unhappy living in
the community.
A prompt request for the disclosure packet will allow the buyer
to be fully informed. The packet contains critical financial data,
insurance coverage, recorded covenants, architectural guidelines
and rules and regulations with which the owner will be expected
to comply once he becomes a homeowner. The packet also contains
information on reserve funds for repairs and future renovations
and a statement as to the existence of any architectural violations
existing on the property.
Most settlement attorneys do not receive a sales contract until
well after it is signed - often after the loan is approved. Aside
from the buyer and seller, real estate agents are usually the only
people involved at a contract's inception. Agents for buyers of
condominiums and other association properties should inform the
closing attorneys or settlement agent by providing a copy of the
resale documents to them immediately upon receipt.
By failing to advise buyers to review an association's disclosure
packet, an agent might be failing to "disclose material facts"
about the home for sale.
Our thanks to G. Robert Kirkland, president of a Virginia Beach
property management consulting firm, and Michael A. Inman, an attorney,
specializing in Virginia community association issues for providing
this page for our clients.
Bernie J. Grablowsky, Ph.D., PCAM
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