Anytime you buy a property that is part of a condo or home owners association you are entitled to a review phase of the respective community per Maryland law. For your protection an addendum will be included in the contract of sale for this review contingency. When buying into a condo association you are entitled to a seven day right of rescission and for a home owners association your are entitle to a five day right of rescission. Once you have a ratified contract to purchase a property you will get a resale package from the building or community that you are buying into seven to ten days after the contract is ratified. The Seller and their agent are responsible for ordering, paying for and delivering the resale package to us.
Below are the items that are required to be included. Some of the associations will also include minutes from the most recent board meetings, reserve studies and other applicable items. The most important document is the resale certificate, which outlines the status and amount of the yearly association fees, whether there are any pending special assessments, amount of money that is in the building reserve account and the presence of any judgements or civil actions against the association.
- Copy of Community Declaration and Bylaws
- Copy of the Rules and Regulations
- Resale Certificate
- Statement of Unit Conformity
- Master Insurance Policy Summary
- Community Operating Budget
- Financial Statements
During this phase I will get any questions you have answered and gather any additional information you would like to see. The settlement company handling your closing and myself will also review the documents to ensure everything is as it should be. If there are any red flags we will bring them to your attention and gather additional information regarding them. In the event that you are financing your purchase your lender will want items from the resale package and I will take care of getting the specific items to them.
Most importantly, you are protected during this phase if there is anything in the resale package that you are not comfortable with or was not disclosed to you when you made the offer. If this is the case you can be released from the contract during these time frames with no questions asked, your deposit is returned to you immediately and you can move on to find another property.
I see very few problems during this phase, though it is a nice protection to have. It gives you the opportunity to review and ensure you are comfortable with the community that you are getting ready to spend a considerable amount of money to buy into. I am aware of a majority of the buildings and associations in the area that have problems and will bring this to your attention prior to you looking at the property for consideration.
If you would like to discuss this or anything else pertaining to real estate in Ocean City MD and the surrounding areas feel free to contact me directly anytime at 443-614-9179 or by email below.