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Why you should read those HOA documents in Delaware

Home Owners: Be Proactive... Read Your HOA Docs.

In Delaware, every community that charges more than $500* a year in an HOA fee or a Condo fee is required to produce very detailed documentation. By law this stack of documents must be given to you for your review and acceptance. If you are buying an existing home, the seller is required to pay for a complete, current set of documents and deliver them to you or your agent. If you do not receive these documents prior to agreeing to purchase the home, the seller is still obligated to provide them to you and give you 5 days to review and accept them. If you object to anything contained in them you may nullify the contract and receive a full refund of all monies you have paid into escrow.

What if you are buying a new home?

The builder/developer is now the seller and is required to provide you with the same complete documentation for your approval and acceptance. The documents can be delivered electronically, on a CD or in hard copy but however and whenever you receive them, you still have those 5 days to read, review and accept them. No response is generally interpreted to mean I Accept.

Whats in these HOA documents?

Lots of important data is in these pages and pages of documentation. So dont let your eyes glaze over. READ THEM. You will find:

  • Declaration and Amendments
  • Bylaws
  • Code of Regulations
  • Rules and amendments
  • Minutes for Executive Board meetings for the preceding 6 months
  • Most recent balance sheet and income and expense statement
  • Most recent audit
  • Current operating budget
  • Statement explaining any unsatisfied judgments against the association and status of any pending lawsuits
  • Statement describing any insurance coverage provided for the benefit of property owners
  • Statement describing any pending sale or encumbrance of common elements

I can already see your eyes getting heavy. You need to sit down and read these with a cup of coffee, not a glass of wine. Make notes, ask questions and realize that this is the only time you have a right to choose Yes or No prior to becoming an owner subject to these rules, regulations and declarations. They are designed to protect you and your property and to ensure that the community remains what it was the day you decided to make it your home.

Special Assessments

The latest amendments to Title 25 of the Delaware Code that governs disclosure were added to provide potential purchasers with a clear snapshot of the financial health of the association. The DUCIOA (DELAWARE UNIFORM COMMON INTEREST OWNERSHIP ACT) includes a Resale Certificate that is only valid for 90 days. It will let you know if the community is in compliance with State law and whether there are or have been special assessments that were outside the normal fees collected. In other words, if the community says that certain amenities and services are included in the fee of $200 per month, this document will tell you if they are collecting sufficient fees to pay for the services provided. This is important, right? READ THE DOCUMENTS.

Do not Assume

You know what can happen when you assume that everyone is doing the right thing? Laws are always passed after abuse and it takes a lot of abuse before new laws are passed. I have often had to insist that the full DUCIOA be provided to my buyer clients by builders in large new home communities before my clients signed a Purchase Agreement. Some builders tell me I am the only one that even asks and others give you a pretty package with a DVD without stressing the importance of the data it contains.

Our next article will talk about some important details like Does my HOA own the clubhouse? Do not assume that the answer is yes.

*This amount is increased every July 1st and excludes optional user fees and insurance paid by the association. As of 7/1/18, the amount was $652.38 per unit.

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  1. John Greene on

    A few months ago my wife and I sold our home in Colorado and it was a bit difficult getting the HOA documents needed for our buyer. A family friend referred us to They were a huge help in making sure we had all the right documents and the information met the state disclosure requirements. I was able to get the whole package together easily by the contract deadline. I don’t think the process could get much easier than the software and service provided by Association Online. You should visit their website or call (970)-226-1324. They’re a great help for homeowners nationwide.
    • Kathy Sperl-Bell on

      John, every state is different and the laws in Delaware require that any HOA or condo that charges more than $500/year in fees produce a disclosure that is very comprehensive. I don't know about the laws in Colorado but I'm glad you found people to help.