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In earlier Closer’s Corners we’ve discussed the big change as to option fees in the new contracts: https://texasnationaltitle.com/article/option-money-and-contract-changes
Let’s now look at how HOA fees are handled in the new Addendum for Property Subject To Mandatory Membership In a Property Owner’s Association (Version 36-9).
Paragraph A is the paragraph where the parties negotiate who is responsible for payment of the “Subdivision Information” or what is commonly known as the “Resale Certificate.” This paragraph has
Please note that this paragraph does specify that the title company is only able to order the resale certificate once up-front payment has been made to the title company for the resale certificate. Your clients can always easily prepay this fee in one of two ways:
Now let’s look at how the remainder of the fees are collected. Under the old addendum “Deposits and Reserves” fell under a separate classification in Paragraph D of the addendum and these fees were to be paid by the buyer:
OLD ADDENDUM (36-8):
Under the new addendum deposits and reserves are no longer a separate fee group to automatically be paid by the buyer. Now they are included in all remaining HOA fees (meaning all fees from the HOA excluding the actual resale certificate) to be paid for by the seller except for any amount negotiated between buyer and seller and written into Paragraph C as shown below:
NEW ADDENDUM (36-9):
Practically this is a big change from the older version of the contract addendum because it reclassifies deposits and reserves as a seller fee except for the negotiated dollar amount shown in Paragraph C. Real estate agents need to be careful in reading this paragraph during negotiations and understand the financial impact to their buyer or seller before the contract is signed. An agent working up a seller or buyer net sheet also needs to take this change into account when preparing fee estimates.
Working with a knowledgeable title company is the key to success! Our escrow teams are the experts that you need and the partners that you can trust. Any time you have questions please do not hesitate to contact us!