A buyer is purchasing a townhome in a Georgia homeowners association. The buyer's agent advises that reviewing the deed alone is sufficient to understand all financial obligations associated with the property. Which statement best describes the scope of due diligence required in a community-association resale transaction?
Correct Answer
A) Thorough resale due diligence typically includes review of governing documents, budgets, current and pending assessments, and any outstanding financial obligations that may transfer to the buyer.
Community-association resale transactions require comprehensive document review that goes well beyond the deed. Under the Georgia Property Owners' Association Act (O.C.G.A. § 44-3-220 et seq.) and the Georgia Condominium Act (O.C.G.A. § 44-3-70 et seq.), associations maintain governing documents, budgets, reserve studies, and assessment schedules that create binding financial obligations on unit owners. Pending special assessments, litigation, and delinquent dues can all transfer to or financially impact a new buyer, making thorough document review essential to informed decision-making.
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