GOOD NEWS!
The FinCEN AML Real Estate Reporting Rule is (temporarily?) on hold. A District Judge in Texas vacated the rule and FinCEN has agreed. No filing of information on reportable transactions required at this time. Check with your Escrow Officer for their procedure at this time. See the FinCEN two-line Alert on https://www.fincen.gov/rre
And back to our original programming…..
YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
I had a conversation with a Seller in which he questioned some charges on his estimate statement pertaining to document and transfer fees for the HOA. He wondered how come there were so many line items and so many fees and why was he not told about it in advance? Here is my answer below:
ANSWER:
Your property is located in a project that has THREE homeowner associations. This is very prevalent in some parts of California, like the newer developments in Orange County and Riverside County. The developer sets up the associations when the project is established and each one takes care of certain aspects of running the project. You might not pay monthly dues for each, but, when it is time to transfer the ownership to a Buyer, they each have to be transferred individually and they each may charge a transfer fee and document fee. Your purchase contract with the Buyer should say who pays for these fees so you might want to check the contract.
Association transfer and document fees can run from $350 – $1,000 each, separately, determined by the Association and its Management Company. This will add up when you consider that it is going to be doubled or tripled for some properties with 2 or more associations!
EDUCATIONAL MOMENT:
It is important for the Seller to be proactive when listing his property. Seller should confirm all homeowner association information and advise his real estate agent. Disclosure should be given in advance to the potential Buyer of how many associations there are and the possible fees charged. In the end, these are fees that the Buyer has to take into account, not only for their monthly budget, but also when they turn around and sell the property in the future.
Please note: It is the Seller’s responsibility to obtain the HOA documents and provide them to the Buyer. Although they may relegate/delegate the ordering of documents to escrow, they still retain this responsibility. It is doubly important to advise the escrow immediately upon opening how many associations are involved and provide them with the association names and contact information. Every once in a while we have a transaction that has closed escrow and we find out AFTER the closing that we missed contacting and transferring one association because we were not given the information.
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~ Video of the Month ~
Can there be a “fun” traffic court? Yes, Dear!
(Don’t miss the moral of the story at 5:05 into the video)
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~ Quote of the Month ~
HOSPITAL CHART BLOOPERS
(Actual writings from hospital charts)
- Patient has chest pain if she lies on her left side for over a year.
- On the second day the knee was better and on the third day it disappeared.
- The patient has been depressed since she began seeing me in 1993.
- Discharge status: Alive but without permission.
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My YouTube Offering for the Month
Money Talks! The 6 W’s of the Earnest Money Deposit you can’t ignore
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
Escrow is my FOREMOST language!
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com