Patrick Duffy's Real Estate Blog

Quick Q&A about the Property Owner’s Association Act

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When you buy a home in Virginia that is part of a property owner’s association (POA), there are several rules that must be followed during the contract phase.  Home buyers are to be provided a copy of the Property Owners Association Disclosure packet which details the associations financials, bylaws and information specific to the home they are buying.  Here are a few questions and answers that clarify some commonly misunderstood aspects of the rules.

Question: How long does a buyer have to terminate the purchase contract after receiving the POA packet?

Answer: Buyers have three days from delivery of the packet to review it.  The wording in the contract is very important.  If “three days” is specified and delivery is on Tuesday at noon, you have until 11:59 PM on Thursday.  If “72 hours” is specified, you have until noon on Thursday.

Question: I’m a buyer and I want to terminate the contract based on the POA packet, but not because I saw something I didn’t like in the packet – I just got cold feet.  Can I do that?

Answer: Your reason does not matter, you have the right to terminate at any time during the termination period.

Question: I am a seller and I’d like to request that the buyer waive their right to receive the POA packet.  Can I do that?

Answer: No.  The POA Act firmly states that buyers may not waive their rights under the act.

Question: Does the POA Act apply to foreclosures and REO (bank owned) properties?

Answer: In the case of a foreclosure (bought at a foreclosure auction) – the Act does not apply and a packet is not required.  However, if the property is being sold by a bank, the Act does apply and a packet is required.

Exciting stuff, I know!  But, this information could prove very useful in your next real estate transaction.  The POA termination period serves as a built-in contingency for buyers and shouldn’t be overlooked as an important part of the contract phase.

Question: I have received the POA packet and I want out of the contract (within the termination period).  What should I do?

Many agents would have you sign a release from the contract which also requires the seller’s signature.  But, what if they refuse to sign it?  You may still be obligated under the contract.  Instead, send a termination.  This is a unilateral act by one party declaring the end to the contract and it does not require the agreement of the other party.

Question: If the buyer receives an incomplete or insufficient POA packet, does the termination period start?

This is an interesting one.  If what is given (whether complete or not) was called the packet or if it was all that was going to be given, the termination period starts then.  Even, simply telling the buyer that no packet will be delivered starts the clock.  As a buyer, always if what you have been delivered is intended to be the packet.  Remember, if you don’t feel the packet is sufficient, you can always pull the plug within the termination period.

Got a question about real estate – I’m here to help.  Contact me anytime at 703-403-0536 or patrick@patrickduffyrealtor.com.