Buyer wants to know what action to take after purchasing investment property and learning HOA forbids rentals

Hi Pat: My title company never sent me the HOA covenants for a home I purchased as a rental investment. The covenants (I discovered after purchase) effectively preclude me from renting the property. Do I have any recourse against the title insurance policy?

I’m not an attorney. However, in California we have more than 25 homeowner association (HOA) documents that the seller must provide to the buyer.

Unfortunately, the seller in an HOA will often delegate the delivery of HOA documents to their seller’s agent, without any follow-up. Additionally, it is not uncommon for the seller’s agent to turn to the escrow officer to order the HOA documents from the HOA management company.

To make the matter more complicated, each HOA management company will have its checklist of HOA documents and costs that reads like a restaurant menu. Conversely, the HOA document checklists and order forms from the California Association of Realtors (C.A.R.) do not. The CAR forms list what HOA documents are required, not required, ordered and received.

Do you get the picture? What appears to be so simple is ignored.

Purchase price and move-in date overshadow a residential home sale, rendering the equally critical moving parts of the transaction unattended.

Your buyer’s agent, the seller’s agent and the sellers have some explaining to do. The escrow officer might have offered or agreed to order or distribute the HOA documents. Either way, speak with a real estate attorney in your state.

For the first time, he or she will examine all aspects of the sale holistically. Only then will you be made whole.

Questions? Realtor Pat Kapowich is a career-long consumer protection advocate and Certified Real Estate Brokerage Manager. 408-245-7700 Pat@ SiliconValleyBroker.com DRE# 00979413 www.SiliconValleyBroker.com YouTube.com/PatKapowich