Common Interest Developments Require Special Care by Agents
Published: August 21, 2026
There are many aspects of home ownership in a common interest development that cannot be observed from an inspection of the property but may be just as relevant
to ownership and use as the physical condition of the property. This is particularly true with respect to the “governing instruments” for common interest subdivisions.
For the reasons set forth below, buyers should be advised to carefully read these documents and to discuss with their agent, an attorney, and financial advisor any
questions they may have about the documents’ meaning and content.
Documents for the Buyer (Civil Code Section 4525)
A seller of a lot/unit in a common interest development is required to furnish the prospective buyer with copies of the following documents as soon as practicable before the transfer of title or the execution of a purchase agreement to the lot/unit:
A copy of the governing documents of the common interest development, including a copy of the association’s articles of incorporation, or, if not incorporated, a statement in writing from an authorized representative of the association that the association is not incorporated.
A statement relative to the enforceability of any age restriction which does not comply with Civil Code Section 51.3, which legally defines and protects senior citizen housing developments and establishes specific age thresholds that communities must enforce to qualify for exemptions from standard age-discrimination laws under the Unruh Civil Rights Act.
A copy of the most recent documents distributed pursuant to Article 7 (commencing with Civil Code Section 5300) of Chapter 6, which includes the HOA’s annual budget report and the annual policy statement.
A true statement as to the amount of the current regular and special (if any) assessments and fees, and any delinquent assessments and related charges, which may become a lien on the unit being sold.
A copy or a summary of any notice previously sent to the owner pursuant to Civil Code Section 5855 that sets forth any alleged violation of the governing documents that remains unresolved at the time of the request.
A copy of the initial list of defects provided to each member of the association pursuant to construction defect prelitigation procedures (Civil Code Section 6000), unless the association and the builder subsequently enter into a settlement agreement or otherwise resolve the matter and the association complies with Civil Code Section 6100. Disclosure of the initial list of defects pursuant to this paragraph does not waive any privilege attached to the document. The initial list of defects shall also include a statement that a final determination as to whether the list of defects is accurate and complete has not been made.
A copy of the latest information provided for in Civil Code Section 6100, which requires HOAs to notify their members when a construction defect settlement is reached with a builder. The notification includes a description of the defects and a good faith estimate of when the defects will be corrected or replaced, and the status of the claims for those defects that were not previously identified in the initial list of defects.
Any change in the association’s current regular and special assessments and fees, which have been approved by the association’s board of directors but have not become due and payable as of the date disclosure is provided.
If there is a provision in the governing documents that prohibits the rental or leasing of any of the separate interests in the common interest development to a renter, lessee, or tenant, a statement describing the prohibition.
If requested by the buyer, a copy of the minutes of board meetings, excluding meetings held in executive session, conducted over the previous 12 months that were approved by the board.
A copy of the report issued pursuant to the most recent exterior elevated elements (balcony) inspections conducted pursuant to Civil Code Section 5551.
Highlights and Considerations
It is essential that a buyer carefully examine these documents, especially the CC&Rs, association rules, and any architectural guidelines, prior to purchasing a lot/unit in a common interest subdivision. Any one of these documents may reveal to the buyer what may be considered material facts associated with the property. These are items that may not be material in the sense of affecting the value of a lot/unit, but they may be extremely important to a buyer’s future plans for using the lot/unit.
An age restriction provision is an example of a material fact for the buyer to look for in the use restrictions. Buyers should also look for restrictions on types of vehicles allowed or whether there are restrictions on pets, architectural design, fence height and location, and other limitations, such as parking or working on cars in the driveway. These restrictions are found in many governing documents. In some instances, there are restrictions on such matters as the color one can use to paint the exterior of a house or the shade of drapes.
A careful review of the governing documents by a buyer is also important so that they can learn about the duties and responsibilities of ownership within the development. For example, who is responsible for internal and external maintenance of a unit? And who has the responsibility to maintain insurance for certain components of a unit? Further, the financial documents pertaining to the operation and maintenance of the common area may include important information relative to future assessment obligations.
When a buyer has questions about any of these documents, a buyer’s agent should, as fiduciary, explain the practical application of the disclosures. For legal or financial advice, buyers should be referred to their legal counsel or appropriate financial advisor.
Special Inquiry on Lawsuits
It is important for the buyer to find out whether the association is involved in a lawsuit or whether a lawsuit involving the association or a seller’s interest is imminent or contemplated. A lawsuit may have a negative effect on ownership. For example, if reserves have been used, or are being used, to pay litigation costs, that expenditure could result in the imposition of a special assessment at some time in the future on a new owner. A lawsuit may also make it difficult to refinance or sell a lot/unit, particularly if the lawsuit involves an allegation of construction defects.
How does a buyer find out about lawsuits? Many common interest developments have newsletters which discuss such matters. In any event, a buyer may want to consider talking to a member of the board of directors, as well as the managing agent for the development, to get a better picture of past and future ownership experience and expectations for the development.
Professional Insight Recommended
A buyer’s agent should not just settle for providing a principal with disclosures following a physical inspection of a lot/unit in a common interest development; they must carefully review the management documents and describe to their client the practical application of the disclosures provided. The agent should also advise the buyer to carefully review the management documents and seek legal or other professional advice, if and when necessary. This will allow buyers to have all the material information needed to decide whether to buy in that common interest development.
