As discussed in previous blogs (see What’s Special about Special Assessments?), HOA/condo special assessments are referenced in the North Carolina standard Offer to Purchase and Contract form. By way of background, the NC Bar Association and NC Association of Realtors® have “Joint Forms” used in residential real estate closings. The standard “Offer to Purchase and Contract” (Standard Form 2-T) is used in most any closing involving a Realtor®. Effective July 1, 2021, there are various changes to the Standard Offer to Purchase and Contract, including the following language regarding special assessments:
- In Paragraph 1(n), the distinctions between a “proposed” and a “confirmed” special assessment have been removed. That’s likely helpful, as there was confusion about what “proposed” and “confirmed” meant, as those are not generally used community association terms. There is now only a definition for “special assessment.“
- In Paragraph 4(x) as part of the buyer‘s due diligence, the buyer is made responsible for investigating any special assessments “under consideration by a governmental authority or an owners‘ association.”
- Paragraph 6(a) makes clear that special assessments that occur following closing are the responsibility of the buyer. “Buyer shall take title subject to Special Assessments that may be approved following settlement.“
- Paragraph 8(k) provides that responsibility for existing special assessments at closing are the responsibility of the seller. “Seller shall pay, in full at Settlement, Special Assessments that are are approved prior to settlement, whether payable in a lump sum or future installments, provided that the amount thereof can be reasonably determined or estimated.”
While any of these provisions can be changed contractually between the buyer and seller in the Offer to Purchase and Contract, these are now the “default” provisions.
To see more changes in the revised Offer to Purchase and Contract, visit this Residential Forms Changes Effective July 1, 2021 document from the NC Association of Realtors®.
If you have questions about any community association (HOA or condo) issue, please contact a Law Firm Carolinas attorney at any of our five offices for assistance.