In our Contract to Buy and Sell in Colorado we have an entire section devoted to what we call CIC Documents (Common Interest Community Documents). These are most commonly known as HOA (Homeowner’s Association) documents. Per the contract they are defined
as:
It is important to understand the requirements/limitations of the community you are considering. For example: What is the fee to transfer to a new owner? Are pets allowed? Can you rent out the home you are considering if you decide to turn that property into a rental? Is the community financially stable, or are reserves low?
If there are monthly or annual dues as part of the HOA make sure you know what they cover. What’s included? (ie: heat? water?)
CIC Documents can be long and a bit overwhelming, but per the contract you will have time (about a week is what I always write in for my clients) to look through the documents and make sure you can “live” within the rules of the community.
Read your documents, do your research and ask questions if you are unsure. On a side note, make sure your lender knows you are considering a community with monthly/quarterly/annual dues. Those will need to be factored into your ratio for loan approval.