Is qualifing buyers typical for Florida HOA's?

11 Replies

I have a contract with a Bank to buy an REO condo in Florida near Boca Raton. It will be a second home, I am paying cash, $100,000. I have bought and sold more than 200 properties in my life, about 60 of those have been in HOAs, mostly in Colorado. This Florida HOA is asking me to provide personal financial information including SS#, date of birth, and DL# that I am unwilling to provide, and the HOA is asking for me to fly down there so they can meet me. I am ok with flying down there to meet them, though I think it silly. I have never heard of any such requirements for a Colorado HOA. I am aware of this type of requirement for NYC co-ops, but co-ops are unique in that you are buying stock in a corporation not actual real estate. This is just a standard real estate transaction. For security reasons I am unwilling to provide this personal financial information (I probably have more assets then everyone else in the tiny HOA put together). I will provide them a recent bank statement showing a balance greater than $300,000 and offer to pay a year of HOA fees in advance, and I will offer to have a third party investigator do a background check on me to prove that I do not have a criminal record, given that I am paying cash there is no logical legal reason why they should refuse my application, but this application process may have little to with the law. This is not a senior only community. Of course the HOA rules state that they do not have to give a reason for a refusal, is this legally accurate? Is this type of application process common in Florida HOA's? What percentage of Florida HOA's would you say have such a requirement? What recourse might I have if my application is refused?

Yes it's common here, I live in the area, HOA's are mad with power but they have reason since the pre market bust brought in alot of seedy investors that messed things up and then all the foreclosures in the aftermath brought in many seedy people and renters after.

I don't have the expertise or the education to assist you on this, but my guess is you will be shocked with the response. Your finances, and ability to pay monthly dues, directly impact the HOA and the condo they are trying to maintain. I saw the "HOA approval" requirement on most of the MLS listings when I was actively looking in St. Pete Beach 5 years ago.

It is typical, but my guess is that they want to be sure you have no "undesirable" criminal offenses; selling drugs, murder and the like, and also to be sure that you can afford the regular HOA fees. I don't imagine that they will refuse you based on what you're willing to provide. After all, cash is king and money talks...

Best~

Lydia

Yep, SOP. And like the condos here, title can not be legally recorded without the written approval, when it's required by HOA doc.s. no worries though, it's cursory, and looking to keep out criminals, etc. They'll always do the interviews by phone/Skype also, as many buyers are not local.

Hi John, my customers mentioned about this challenge a few times. Things have become too complex in the few years as many HOAs have gone thro financial mess.

Thanks

Atchut

@John Rooster  Please keep us posted on what happened I am curious to know if they will fold.

Originally posted by @Wayne Brooks:

Yep, SOP. And like the condos here, title can not be legally recorded without the written approval, when it's required by HOA doc.s. no worries though, it's cursory, and looking to keep out criminals, etc. They'll always do the interviews by phone/Skype also, as many buyers are not local.

 Are you saying that since I am paying cash you think they will accept the Bank statement documentation and criminal background check I am willing to provide in lieu of the personal financial information (SS#, DL#, DOB) that they are requesting but that I am unwilling to provide?

You should never buy in HOA. You can also collect all the names on the board and say you need their full name and DOB so you can do a background and criminal check on them, and you do have a right to know who is running the HOA board. You might want to read about all the HOA criminals in Las Vegas.


Joe Gore

Originally posted by @Eddie T.:

@John Rooster Please keep us posted on what happened I am curious to know if they will fold.

I will, but I would not characterize it as folding. HOAs often adopt stuff like this because of "everyone else is doing it" logic. The form they used was almost certainly copied directly from some other HOA's rules, and zero thought went into the details of what they were requesting. The primary purpose of the form seems to be deterance of renting to criminals, the unintended consequence is that the form is needlessly invasive. I don't expect a problem, but once in place you never know how such rules are going to be enforced by the decision maker, that person might be reasonable or they might be a pedantic pinhead.

@John Rooster  

Not saying they won't require the info you're not willing to provide, never had anyone refuse to provide it.  If I were some criminal/fraudster, I (or my "attorney") might be trying to provide them some false background check.  I see as sort of like the "no commercial vehicles, etc" rules.  I don't want to live where there's lots of dump trucks parked at home.  Just food for thought.

Update: The HOA board will not consider my application because of my unwillingness to provide SS#, DOB and DL#, even though, as I stated before, I am paying cash, can demonstrate $100,000s in cash in a checking account, am providing financial references, am willing to submit to independent criminal records search, and am willing to pay a year of HOA fees in advance. They may just be pedantic pinheads, or they be intentionally obstructing the sale in an effort to assist the prior owner, who still lives in the property. I was buying the property subject to the occupancy rights of the prior owner, and would have had to either evict or negotiate with the prior owner to get her to vacate the property. it is a very small association (12 units), it is quite possible that the prior owner knows someone on the HOA board well enough to pull such a stunt.

"Don't buy in an HOA" is not really an option for me, as those of you know that live in the area, a very large percentage of homes in the area are in HOAs, and I want a condo not an SFR, it is essentially a given that a condo in that area is going to be in an HOA. I am currently considering buying a property at foreclosure sale in order to get around the application requirement. Other suggestions appreciated.

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