Who Pays Overdue HOA Fees at Closing in Maryland?

Maryland Homeowners Association (HOA) fees are required part of owning property within a community governed by an HOA.

But many sellers want to know, who pays these fees when they are overdue at closing? The answer may surprise you.

Maryland house for sale with overdue hoa fees
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Disclaimer: This blog post and website provides general information on Maryland real estate. Maryland Estates, LLC, doing business as Creo Home Buyers, and its authors are not liable for the accuracy or use of this information; consult with a trusted real estate professional or attorney for guidance regarding your unique selling situation.

So, Who is Responsible for Paying Unpaid HOA Fees at Closing?

At the time of closing, the responsibility for paying outstanding HOA dues and fees is typically transferred from the seller to the buyer.

That’s right! Typically, the new homeowner is responsible for any outstanding HOA fees at the time of closing. Though, it ultimately depends on the agreement between the buyer and seller.

Whoever decides to take responsibility for payment, must pay unpaid fees and any associated late fees or interest. The buyer should be aware of these financial obligations and factor them into their budget when purchasing a property governed by an HOA.

Consequences of Unpaid HOA Fees at Closing

If a homeowner has delinquent dues with the HOA, the association may put a lien on the property. This can create complications when trying to sell the home. HOAs are sometimes known to be uncooperative, especially when selling a property with overdue fees.

Late fees and interest may accrue on overdue HOA fees. This further increases the financial burden on the next homeowner and reduces your net proceeds.

It’s important for both buyers and sellers to address any unpaid HOA fees at closing to avoid potential legal and financial repercussions.

How to Address Overdue HOA Fees at Closing

Addressing overdue HOA fees at closing requires proactive steps to ensure these are properly paid off during the sale.

Homeowners with overdue HOA fees should prioritize communication with the HOA management and the closing attorney to address and settle any outstanding payments.

Being proactive in resolving the unpaid fees can help mitigate potential legal and financial repercussions. Doing so in advance also helps to minimize the chance of closing delays.

Working with the HOA to Clear Outstanding Fees at Closing

There are several options for resolving unpaid HOA dues at closing.

  • Payment Plan: If the homeowner is unable to pay the HOA dues in full, they can negotiate a payment plan with the HOA. This could involve making monthly payments over a certain period of time until the debt is paid off. 
  • Pay in Full: Another option is for the seller to pay the unpaid dues in full prior to closing. This ensures that the new owner will not be responsible for any outstanding fees.
  • Seller Proceeds: Alternatively, the seller and buyer can agree to have the unpaid dues deducted from the seller’s proceeds at closing, with the buyer assuming responsibility for the outstanding fees. This can be a potential option if the buyer is aware of the unpaid dues and is willing to take on the responsibility.

It’s important for both parties to discuss and come to an agreement on how the unpaid HOA dues will be handled at closing.

It’s also important for the buyer to be aware of any outstanding fees and to factor them into their decision-making process when purchasing the property. 

Avoid Paying Overdue HOA Fees at Closing

If you’re dealing with overdue HOA fees, it’s crucial to address them proactively before closing to avoid complications.

However, if you want to sell your house and not worry about paying overdue HOA fees, consider selling to a local Maryland house buying company.

It takes just five minutes to request a free, no-obligation home offer from Creo Home Buyers, helping you settle your outstanding HOA fees and streamline the closing process.

Get your fair (no-obligation to accept) home offer started today by contacting us at Creo Home Buyers in Maryland!

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