Red Flags! – HOA & CIC

– Ron Hoy – Executive Vice President

In today’s world, many home owners live in a common interest community (CIC) or home owner’s association (HOA). Each association has a board of directors that is in charge of the care, custody & control of the association. Each board of directors that is in charge of the care, custody & control of the association. Each board is required to follow the governing documents and amendments which were created when the project was being developed.

California and Nevada are very similar when it comes to the resale package that must be provided to the new purchaser. The resale package provides copies of the governing documents, minutes of meetings, assessments, rules & regulations, status of current association fees, budgets, reserves & present and pending assessments.

Unfortunately, a lot of homeowners don’t always pay attention to what their Board is doing. In today’s world, a lot of associations in an effort to cut down on costs now email the events of the board meeting to their members. While this is an efficient way to communicate, it can also be problematic as people have a tendency not to pay attention. Therefore, the owners are not as informed as they could or should be.

Whether you are representing a Seller or a Buyer, it is important that you are able to review the resale package with your clients. As they are filling out the various disclosures that refer to an association specifically assessments you want to be sure that everyone has the correct information.


Quick story

Listing agent lists a home in a CIC and the homeowners check the box that there are no assessments. The homeowners had received the minutes of the meetings and copies of those minutes were also available on the CIC website via the owner’s portal. In the minutes of the meeting, there were lots of discussions regarding retaining walls and other items that need repair, as well as discussion regarding getting bids. There was never anything formal that used the word “assessment”.

The buyer received the resale package along with all of the minutes of the meetings and received the disclosure from the seller that stated there were no assessments. The sale was completed and 30 days or so later the new buyer was advised by the CIC Board that the board had approved an assessment in the amount of $30,000 to be paid $5,000.00 a year for 6 years.


RED Flags

  1. The Board could have included a message that discussed the repairs for the future.
  2. The sellers could have disclosed about the future repairs.
  3. The buyers certainly would have known that something was up if they read the minutes.
  4. The difficult part was at the time there truly was no assessment – the seller did not lie but a little common sense from all parties would have solved a lot of problems.


From a company stand point-

We believe it is important for us to get a copy of the resale package for our client’s file. Having copies of the minutes, budgets, reserves, assessments future assessments and/or class action law suits goes a long way to ensure that you and our buyers and sellers are informed. “BE SURE YOU TAKE THE TIME AND READ THE RESALE PACKAGE AS WELL AS THE PRELIMINARY TILE REPORT”

Finally, we also need to ensure that our Buyers have received and read the Home Owners CC and R’s and Rules and Regulations. Several of the current Hot Topics include size and number of pets, vehicle parking, and restrictions on renting out the property.

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