Avoiding Headaches when Buying a Home
One couple, recent purchasers, found out months after the purchase of their home that they are, in fact, members of a homeowners’ association. Other new homeowners talk about problems with zoning issues.
Whether the new homeowners consider the discoveries to be mild or maddening, one question remains: Who do they turn to? Should they talk to an attorney? Was there something they could have done to prevent such problems?
Fremont attorney John Kitta says that homeowners’ associations, particularly, “can be a hidden minefield.” Kitta says that is particularly true for smaller associations who have chosen not to hire professional management companies.
“Associations often don’t maintain appropriate reserve accounts and are under-funded.” Kitta says that often, homeowners in underfunded associations find themselves required to pony up a “special assessment” to cover the gap. Kitta has seen instances where such a special assessment is as much as $20,000 to $40,000.
“It’s very important people are aware of their homeowners association,” he says, noting that documents pertaining to the association, such as the Conditions Covenants and Restrictions (called the CC&Rs) are closely inspected.
In the case of the couple who was unaware of their home’s inclusion in an HOA, Kitta says there were several possible layers of failure. “The seller should have disclosed it. The seller’s broker should have been aware of the HOA and made sure the disclosure was made. And the HOA would also come up on a preliminary title report.”
Of course, anyone who has purchased a home in the last 10 years knows that the amount of paper involved in even the simplest home purchase can be overwhelming. That, Kitta notes, is a problem endemic to the home purchasing system. “Often, people defer to what they perceive to be the wisdom of the experts,” he says, relying on real estate agents, brokers, or other professionals instead of reading documents for themselves.
But Kitta says that even those who read every scrap of paper aren’t necessarily in a better position. “The way things are written up, they may not understand it anyway,” he says, leaving many home purchasers unaware of what they are really stating.
That is why Kitta encourages would-be home purchasers to have their purchase documents reviewed by an attorney prior to signing – and before problems arise. “It’s the ounce of prevention that’s well worth it, because it is so complicated,” he notes. “In a very few words, the whole contract can be turned upside down.”
Kitta says such misunderstandings are common, and are one of the primary reasons home buyers find their way to an attorney’s office after the fact. “People often don’t realize that, based on what they signed, they have to go through mediation, or that they have to do something right away or lose their deposit because they agreed ‘time is of the essence’,” he explains.
Another common fallacy among buyers is that because sellers offer the home “as-is” buyers are stuck with whatever they may find, Kitta says, when in fact California’s disclosure laws still require sellers to make buyers aware of items.
In fact, non-disclosure is one of the primary problems homebuyers discover. Kitta cites, as an example, a case where the sellers of a home knew the neighbors practiced their music until the wee hours of the morning, yet failed to let the eventual buyers know of the problem. In another case, buyers didn’t realize their home was in the flight path of San Jose’s airport until they lost sleep thanks to the overhead roar of jets landing and taking off.
More problematic issues arise, Kitta notes, around mold and pests. “What’s really huge right now are non-disclosures over mold, where people are just painting right over it.” That and common problems with termites and other pests cause Kitta to strongly recommend that buyers have in-depth inspections, including their own pest inspection. “You want someone who is a member of a professional association and who has done, maybe, 1,000 inspections,” he says.
Kitta also encourages buyers, particularly first-time buyers, to slow down and look closely at the landscape around their desired home. “You want to check out the schools, check the crime in the area. Sellers should look around the neighborhood and look for any features that might impact quality of life, such as railroad tracks. Does that mean they are going to hear trains in the middle of the night and can’t sleep?”
And if nothing much is around, Kitta says, then that kind of homework is even more important. “If the home is in a new neighborhood, you want to check out the General Plan and see what the city is planning to build around you, so you don’t wind up on the edge of an industrial area,” he explains.
Kitta says buyers should also think about their future lives. “If you’re going to have kids, you should think about what hazards you don’t want around the home once they arrive. On the other end, once you’re 75 years old, you won’t want to be 20 miles away from the grocery store, and retirees will want access to medical care close by.”
Kitta says that many people rush the home buying process, when in fact, it should be done very carefully and thoroughly. “For most people, their home is usually the most important thing they have going. This is NOT like buying a car, it is even more important. Yet people often put more into buying a $20,000 car than a $750,000 home,” he concludes.
