TIRED OF EATING YOUR SELLER’S HOA FEES BECAUSE YOU DIDN’T FILL OUT THE CDA PROPERLY?
The Community Association Fees, Disclosures and Related Issues Exhibit (CAD) is now GAR Form F322. The seller must disclose the amounts of the fees to be paid by the buyer in paragraph 4(A). The directions for completing this section have been revised to include a statement that if a fee is not accurately disclosed or left blank, the seller pays the difference between the amount disclosed and the actual amount owed. This change means that if a seller discloses an inaccurate amount or leaves a blank for a type of fee to be paid, the seller will be responsible at closing for the excess or the entire fee that is in fact charged by the association. Paragraph 5 reiterates this same consequence if special assessments under Paragraph 4(D) are inaccurately disclosed or left blank. Also, in Paragraph 5 the seller warrants that the seller has made accurate and full disclosures, and acknowledges that the fees and assessments are actual seller fees and are not to be considered seller concessions or contributions to buyer’s costs.
In the past, sellers have been frustrated at closing when they are charged for HOA fees that were improperly disclosed on the CAD. The form is clear about the consequences for inaccurate or incomplete disclosures. Therefore, to avoid seller frustration on this point, or even worse, to avoid incurring the loss on the seller’s behalf because the importance of accuracy wasn’t stressed with the client, it is very important for agents to encourage sellers to obtain accurate and complete fee and assessment information at the time they complete the CAD.
