It seems each New Year brings with it more issues that come into an already complicated real estate transaction. Litigation and legislation seem to be the main influences that keep our contracts expanding. New for us in Colorado this year on the approved contracts are sections that pertain to HOA documentation, dealing with foreclosed property and issues regarding the disclosure of methamphetimine. All of these issues came from 2006 legislation at the state level and are designed to protect the public.
- Common Interest Community (CIC) – The new section about HOA’s sets forth that a Buyer will be required to become a part of the association and will need to abide by all of the rules. In order to agree a buyer needs to understand the rules, right? So the contract now says what information will be required (Bylaws, Rules and Regulations, most recent annual balance statelment, annual income and expenditures statement, annual budget, moste recent annual owner’s meeting minutes and any directors meeting minutes from the past 6 months) and who is responsible for providing it. This comes down to the Seller getting and paying for the documentation. If the Buyer objects to any of this information they can cancel within a date set forth in the offer.
- Foreclosure – This new section requires that an addenda be attached to the contract if a foreclosed property is being purchased by an investor. This is supposed to protect homeonwers who sign their house away to investor/predators who claim to have a way to save their home. This does not apply if an owner occupant buys a foreclosure.
- Methamphetamine – This is a growing issue locally and nationally. Most manufacturers of this nasty drug “cook” the stuff in residential houses. The residue is toxic and will contaminate a house. In order to clean up a house it must be cleaned to the standards of the State Health Department. The new language in the contract requires Sellers disclosure of presence of a meth lab. Even if the Seller says that the house has not been used for that purpose Buyer may investigate by hiring a certified hygenist to test. If the Buyer finds meth residue as a result of the test they can cancel at any time up to closing. This is fairly new so I will be interested in finding a certified hygenist and seeing how much they cost.