Common HOA Problems When Selling

• Unpaid dues and assessments — Accumulate as a lien on the property
• Fines for violations — Unpaid fines also become liens
• Open violations — Unapproved modifications, landscaping issues, exterior condition
• Special assessments — One-time charges for major repairs (roof, pool, etc.)
• Pending litigation — HOA lawsuits involving the property

How Unpaid HOA Balances Are Handled at Closing

The title company requests an HOA estoppel letter — a document from the HOA stating the current balance owed (dues, fines, assessments, interest, and attorney fees). This balance is paid from the sale proceeds at closing. The buyer receives a clean title with no outstanding HOA obligations.

Open Violations: Disclose and Negotiate

Open HOA violations must be disclosed to buyers. Options include:

• Cure the violation before closing (fix the issue)
• Negotiate a price reduction to compensate the buyer for curing it
• Sell to a cash buyer who accepts the property as-is with the violation

HOA Right of First Refusal

Some HOA governing documents include a right of first refusal — the HOA has the right to purchase the property at the same price as a third-party buyer. Check your HOA documents and notify the HOA of the sale as required. Most HOAs don't exercise this right, but the notice requirement must be followed.

HOA Approval of Buyers

Some HOAs require buyer approval or an interview process. This can add time to the closing timeline. Review your HOA documents to understand the requirements and factor this into your sale timeline.