Cohousing-L Mailing List: Re: Involvement in Closing of Home Sales

[Ann Zabaldo (zabaldo]

Hi Julie!

Thanks for this additional information.  It’s very helpful.

See below.



> On Jun 12, 2017, at 12:32 PM, Julie Gallagher <jgall63 [at] gmail.com> wrote:
> 
> 
> Hi Ann,
> 
> Cantine's Island is organized as a homeowners' association, with fee simple
> ownership of individual homes. The sale agreements for the homes contain
> the following language:
> 
>          "Purchaser acknowledges that Purchaser has received and reviewed
> a copy of Offering materials consisting of the Declaration and By-Laws of
> Cantine’s Island Homeowner’s Association prior to the execution of this
> Agreement. Purchaser understands and agrees that Purchaser shall
> automatically become a member of the Association and be bound by the
> Declaration and By-Laws, Exhibits and other provisions herein contained in
> the Offering materials, all of which are incorporated herein by reference
> and that Seller has made no representations with regard thereto.”

All of this is standard fare in buying into a condo or an HoA.  I’m not sure 
about a co-op.

By law, the purchaser has to receive the Condo Docs which includes the 
Declaration and the By-laws.  They must also receive information on the 
financial health of the community including the reserves, the budget, policies, 
etc. So this is nothing unusual.  The seller is required by law to provide 
this.  And all the information you are quoting above will be in the Declaration 
and By-laws.

> 
> Of course, our Declaration and By-Laws also state that anyone purchasing a
> home automatically becomes a member of the HOA, but it seems helpful to
> also have this language in the sale contract, which is the only thing the
> purchaser signs.

This is totally fine but not necessary since the By-laws will have this 
included.  And, of course, the seller is providing the By-laws to the buyer.  

This leads me to wonder … do you perhpas have a reason to include this language 
in the sales contract?

Have you had problems w/ people buying in to your community who do not realize 
they are buying into an HoA?  If so, then maybe it’s not the sales contract 
that needs improvement but your marketing, outreach and resales process.  
Getting to the sales contract without the buyer understanding that he/she is 
buying into an HoA is pretty late in the process.  And doubly so if they don’t 
understand what it means to buy into a COHOUSING condo/HoA.

> I'm surprised that you see no reason for the sale contract to have language
> about joining the community. Doesn't the home sale always include a share
> of ownership of the common property, and an obligation to follow the rules
> of the HOA or condo association? That's why it seems to me it should be
> included in the sale contract.
> 
> Julie

The reason is because this is what buying into a condominium or HoA IS:  you 
own your home and a share of the rest of the property according to some formula 
which is described either in the Declaration or the By-laws.  Have you had 
buyers get to settlement who don’t realize this?

What I’m not understanding is what problem you are trying to solve?  Have you 
had problems w/ people buying at Cantine’s Island who were surprised learning 
they were members of an HoA?  Or that they owned a partial share of the common 
property?    Or that there are condo/HoA rules and obligations?

In our Resale and Rental procedures here at TVC we cover all this information 
early on through our Tour Presentations (2 hour presentation about living at 
TVC) in which we invite prospects to attend.  We do this four times a year 
whether we have homes to sell or not.  Our purpose is to constantly educate an 
ever evolving pool of prospective buyers.  All our documents are on line 
available for everyone to read any time.

Actually, what I think is more important is providing information to a 
prospective buyer on what it means to live in a COHOUSING condo/HoA and in 
particular what it means to live at ________Cohousing.    What are your 
expectations?  What expectations do you have of people to participate in work 
share, meals, events, governance?  Here at TVC we ask people to attend a 
membership meeting or a team meeting, a dinner, a social event and if possible, 
a work day.   We’ve actually had prospective buyers realize cohousing is not 
for them once they attend a meeting or a work day.  On the other hand … for 
people who do attend these various activities … we end up with really well 
educated prospects who buy when a unit is available.  

Just last night I heard about a person who bought into a cohousing community 
that has no resale team or process.  The new buyer is lovely, nice, friendly 
etc.  He came to his first meeting and at the end said: “Thank you for inviting 
me to this meeting.  This was very interesting and I have no interest in 
participating or being part of this community.”  And while he remains a nice, 
friendly neighbor he’s not a contributor to the community.  He lives in a nice 
neighborhood with other people doing all the work. This is what can happen if 
you have no resale process for educating buyers.

If you are having problems with people buying into your community who are not 
aware of what they are buying into, then a robust Resale and Rental program is 
the answer along with a similarly robust orientation program when they move in.

I’ve presented on this topic at the last two national cohousing conferences 
2015 and 2017.  Maybe if some of the attendees at my workshop are on this list 
they might contribute a line or two about what they learned.  And if they’ve 
instituted something … cool!  Let’s hear it!   

I believe having a resales and orientation process is one of the great needs in 
cohousing.

O.  BTW … our Resale and Rental pod (team) has raised $45,000 for our 
community.  Why?  Because we provide educated buyers for the sellers so their 
sales are For Sale By Owner (no real estate agent) saving the seller 6% of the 
sale or an average of $20,000 per sale.  Sellers are more than delighted to 
make a contribution to the community for its active involvement in educating 
prospective buyers.

More than my 2 cents …

:-)


Best --

Ann Zabaldo
Takoma Village Cohousing
Washington, DC
Principal, Cohousing Collaborative, LLC
Falls Church, VA
202.546.4654

As long as you have two or fewer … your ducks are always in a row.  The Covert 
Comic