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Can My Buyer Waive Receipt of HOA Documents?

by Carter, Brian on

In a competitive seller’s market, buyers often try to be creative when presenting an offer in hopes of having their offer accepted out of the multiple offers a seller receives.

One question coming up on the PAR Legal Hotline with increasing frequency is buyers wanting to waive receipt of condominium association or planned community association documents, along with their right to void an Agreement of Sale within five days of receiving the documents. In short, this attempted waiver does not track with the requirements of the law, and may not be enforceable against a buyer who elects to terminate for this reason.

As a brief overview, the Uniform Condominium Act and the Uniform Planned Community Act  require sellers to provide buyers with relevant condominium documents or planned community documents as part of the sale of a unit. In short, sellers of units are required to provide a copy of the bylaws, rules and regulations and a certificate relating to certain items.

To help protect buyers, the laws further provide that buyers have the right to void an Agreement of Sale until either five days after receipt of association documents or closing, whichever is earlier.

Without going into the gory details of a thorough legal analysis, the obligations of both laws apply to “all units subject to” the relevant law. Both acts contain language that the obligations, protections and rights “may not be varied by agreement, and . . . may not be waived,” unless there is an express waiver provision in the law. (See 68 Pa. C.S. § 4104 and § 5104.) The laws do expressly allow for waiver of providing association documents in very limited circumstances, but those waivers are limited to the nonresidential use of a unit or by buyers who are in the business of buying and selling units.

Because there is no waiver provision for residential transactions, the law appears to say that buyers are not able to waive receipt of association documents as part of their offers. Nor are buyers able to waive their right to void the Agreement of Sale. Any effort to waive either receipt of the association documents or to waive a buyer’s right to void the agreement could therefore be unenforceable by a seller.

Listing agents discussing an offer with this sort of term should be aware that a seller may not be able to enforce it and should discuss with their sellers whether this term should have any impact on their decision to accept one offer over another.

Topics

HOA Agreement of sale Homeowners association Form ASR
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Marshal Granor

Rather than try to get the buyer to waive a non-waivable provision, I recommend that the listing agent and seller obtain the resale certificate and any other required association documentation when the listing is taken. These documents can be provided to potential buyers along with the Seller’s Property Disclosure Form, so the right of rescission timing can begin with the buyer’s offer.

Why allow a cancellation provision to linger when a savvy listing agent can have the rescission timing run out even before the home inspection is completed?

Craig Melichar

Regarding Marshal Granor’s suggestion from what I understand about Condo docs, they are the only docs that bypass the agents and are supposed to be delivered directly from Seller to Buyer to make sure that they are the most current documents. For listings not sold within say 30 days I could see a scenario where the condo board made changes at a meeting scheduled in the interim that would not show up on docs requested in advance of a Sales Agreement?