Sellers Should Disclose ALL Owners’ Association Fees/charges/arrearages/assessments/etc. When Completing the LLR Seller Disclosure and HOA Addendum
***When using LLR seller disclosure forms, Sellers failing to accurately disclose all the owners association charges to the buyer will expose the sellers to a buyer lawsuit suing the sellers for the buyer’s damages (aka the undisclosed owners association charges/fees/assessments/arrearages/etc.) AND THE BUYER’S ATTORNEY FEES (which could dwarf the charges).***
http://www.llr.state.sc.us/POL/REC/RECPDF/Residential%20Property%20Condition%20Disclosure%20Statement%20Addendum.pdf
Here is the language bolded from the current LLR seller disclosure HOA addendum from LLR:
Describe owners association charges $ ______________ (per year month other)
[While this is a small blank, the directive/question is inclusive of all owners association charges and the blank can easily accommodate a four or five or six figure total amount.]
11. Is there a transfer fee levied to transfer the property?
Yes,
No,
No-representation
(not including recording costs related to value or deed stamps)
[Note: This question #11 includes both the private transfer fees of the HOA and the grandfathered public transfer fees that exist in some parts of SC.}
Explain any YES answers in this space below and attach any additional sheets or relevant documents as needed.
If additional space is needed, then this blank can be used in the form or to notate that documents are attached to the seller disclosure forms such as the owners association written statement of total payments due on a date for a transfer and owners association minutes and letters sent to the seller by the owners association documenting fees/fines/arrearages/assessments/special assessments/monthly fees/transfer fees of varying names/etc.
NOTICE: While "certificate of assessment" is a common term in the Grand Strand area commonly used by real estate professionals and attorneys, this term is read differently in other parts of the state. In the Grand Strand, the certificate of assessment is the letter from the owners association to the seller that states how much total money is owed to transfer a particular property by a certain date. In other areas of the state such as Charleston, at least one owners associations has named their private transfer fee as a "certificate of assessment. In other parts of the state, confusion occurs as people interpret "assessment" to mean property tax assessment, which while makes no common sense in reading SCR310 contract, but is, unfortunately, a common misconception.
Therefore, the SCR forms committee tries to clarify this issues with this language in the SCR310/300 Transaction Costs section:
Buyer's transaction costs include all…costs to obtain information from or pertaining to the owners association (e.g. certificate of assessment)…
Also, the SCR310 contract allows parties to agree that the seller will pay $ _______ or __% of purchase price towards these Buyer's transaction costs which can include this "certificate of assessment" per the contract.
Additionally, the SCR310 contract allows the parties to decide who will pay the owners association private transfer fees via a checkbox choice. Note: This also includes the grandfathered public transfer fees that exist in pockets of SC such as Hilton Head.
And the SCR310 contract contains a blank line for unusual local market or neighborhood issues such as a uniquely named owners association charge or s unique market custom as to who customarily pays for some isolated charge perhaps related to the owners association (e.g. checkbox seller pays for owners association fees except one unique owners association fee that is written into the blank line).
Posted by : Byron King on 4/25/18 (This information is only accurate as of 4/25/18. You must contact SCR for updates and changes to this information after 4/25/18 as laws and regulations may change over time. SCR 803-772-5206 or email info at
screaltors.org)
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