The Bunyans decided to move into the suburbs, and contracted to purchase a home in a very nice subdivision governed by a Home Owners Assocation, (HOA) on a heavily-wooded lot. The family did not like the trees, but the house was beautiful and perfect for their needs.

Although the property was located within a community governed by a homeowner’s association, and thus subject to regulations as set forth in a declaration of covenants, the FARBAR Contract for the Purchase of Property, failed to include the “Homeowner’s Assocation/Community Disclosure Addendum.”

The closing was handled by a title company that did not have an attorney on staff. The Bunyans, who had never lived in a housing subdivision governed by an HOA, were not aware that the property was subject to regulations, and the title company failed to make them aware of that fact, and failed to make sure that the Addendum was made part of the contract. The closing went through and te bunyans moved into their new home.

After closing and moving into the house, the Bunyans decided to cut down all the trees in the yard. Within a few hours. 43 mature trees had been cut down and removed from the yard.

Late that afternoon, a representative from the HOA stopped by and informed the Bunyans in no uncertain terms that the subdivision restrictions prohibited the cutting of any trees unless they were diseased or dead, or were a threat to the house. The restrictions futher stated that if the homeowner cut down any trees unnecessarily, the owner would replace them at their own sole expense with trees of a similar size.

The Bunyans were forced to spend over $45,000 to replace what they hated.
 

Lesson Learned: If the Bunyans had used a title company, like American Real Title, which has a lawyer on staff, the Addendum would have been part of the closing paperwork and the lawyer would have gone over it with them. If you are purchasing a home in a regulated subdivision, there will be restrictions, some of which you may not like. Do not close on your house without knowing the restrictions. Look for the “Homeowner’s Assocation/Community Disclosure Addendum” in your closing paperwork and be sure to go over it with your title company. A buyer has a statutory right to terminate the contract if the Buyer does not receive a notice of the restrictions, however, this right terminates at closing. Once closing occurs, the Buyer has no recourse, even if the Buyer never received notice of the restrictions. An attorney can obtain a copy of the restrictions, and review them with you prior to closing, to assure that you can live with the language contained therein.