Can an HOA prevent me from selling my house?

An in-depth guide to selling your home in an HOA

Selling your home in a homeowners association (HOA) community? Congratulations! Now, the real work begins. Taking steps to arrange your home and navigate the legalities can be challenging, especially if you need to become more familiar with best practices for a successful sale. Additionally, if you're exploring your HOA's governing powers during this transition and wondering, "Can an HOA prevent me from selling my house?" don't worry. In this article, we'll cover everything you need to know about selling a home with an HOA, including responsibilities, potential challenges, and frequently asked questions from other sellers like you—helping you turn that "For Sale" sign into "Sold."

A quick tip before you get started:  if you live in an HOA community, we recommend contacting your association board or property management company for expert guidance.
 

How selling in an HOA differs from other home sales

Selling your home in an HOA can vary from a traditional sale in many ways. When you own a property in an HOA community, there are rules and regulations you must abide by. You also have your association dues, fees, and assessments, which can vary depending on your location and community.
Because of all these characteristics, an HOA sale differs from other home sales since the prospective homeowner must meet specific disclosures and requirements. You are not only selling your home but also the fact that your home is part of an association. Although transparency should be expected in every home sale, it is especially crucial in homes in an HOA, as prospective buyers need to know all the rules and regulations and become familiar with their future responsibilities.
 

Can an HOA prevent you from selling your home?

HOAs can only indirectly prevent you from selling your home. And they can do this by rejecting your sale proposal under certain conditions, these can include:

• Unpaid dues by the owner
   
• Material misrepresentation by the prospective owner
   
• Violations of the community's regulations

Since these are reasonable, non-discriminatory, and comply with state and federal laws, their decisions can be considered backed and appropriate.
 

What is needed for selling in an HOA?

For accurate transparency when selling your HOA home, the following documents are typically needed for selling in an HOA:

• Governing documents, such as CC&Rs, bylaws, and rules
   
• Information on the HOA's dues, payment schedule, and any additional fees like transfer or capital contribution fees
   
• Documentation of any outstanding violations or fines
   
• Financial reports, including budgets and reserve studies
   
• A statement of account related to the property being sold

Payments necessary when selling your home in an HOA

If you're a seller, you should be prepared to cover various costs during the sale of a property in an HOA, including:

• Disclosure document fees: Fees charged by the HOA for preparing and providing necessary documents for the buyer. Depending on the complexity and local regulations, these can range from a few hundred dollars.
   
• Unpaid Fees: Any outstanding HOA fees must be settled before the sale can proceed. This may include payments for fines or assessments.
   
• Transfer Fees: Many HOAs charge fees to cover administrative tasks associated with transferring ownership records. Typically, the sellers pay these, but it may be negotiable.
   
• Inspection Fees: HOAs may require a compliance inspection to see if the property meets community standards. The cost for this inspection generally falls on the seller as well.

Frequently asked questions 

Can an HOA evict you?

If you are a homeowner, an HOA cannot evict you without reason. Instead, they could enact an HOA foreclosure by placing a lien on the property. An HOA lien is a legal claim for HOAs to put on a specific property if the homeowner doesn't pay their dues/assessments. With this, the association can collect the amount it is owed using foreclosure if necessary.

With this lien, this typically takes priority over other existing liens. Additionally, you must continue paying your mortgage to your lender until the HOA moves to foreclosure on your home.
 

Can an HOA make you move?

Technically no. An HOA cannot make you move without legally responsible reason. Unless it enacts a lien on your property and initiates foreclosure, they cannot evict you from your property.

The process differs if you are a tenant since you are not the legal homeowner, just a renter. The HOA would have to contact the landlord/homeowner to discuss anything related to the property and the community, including unpaid dues and fees. If they are to place a lien on your rented property, this may cause the homeowner to foreclosure and, therefore, terminate your residency there.
 

Can you take legal action against an HOA for rejecting a home sale?

Yes, you can take legal action against your HOA for rejecting a home sale if the rejection is based on discriminatory reasons or the association does not adhere to its governing documents and policies.
 

Can HOA violations affect your home sale?

Yes, HOA violations can affect your home sale. If your HOA sees you currently have or previously had a breach of community guidelines and regulations, they may take action and reject your sale proposal until these are resolved.

To avoid delays, we recommend that owners seek to address any outstanding violations before initiating a sale.
 

Make informed decisions

Taking the necessary to navigate the complexities of selling your HOA home may require some effort, but understanding all the responsibilities and challenges you may tackle can help provide you with a smooth sales process.

We suggest you contact an HOA lawyer, realtor, association, and management company if you have any questions during this process, as most of its functionality is specific to HOAs only.

To learn how FirstService Residential can support your community's vision, contact a member of our team.