The Paperwork: The primary types of paperwork affecting the purchase of real property are documents found in the public record as listed in your preliminary title report, and any private equitable servitudes, conditions, restrictions, or rules and regulations governing the parcel’s use.
- Title Report I. Idaho residential purchase and sale agreements do not typically require disclosure of the preliminary title report prior to six (6) days before the close of escrow. However, a preliminary title report is critically important because that is where you find the list of documents in the public record that might affect title to or use of the land. Idaho commercial purchase and sale agreements require the seller to order a preliminary title report for the buyer upon acceptance of the offer.
- Title Report II. Due to differences in different types of residential and commercial contracts, we suggest you modify your contract to make acceptance of and approval of the preliminary title report and the documents identified in it a contingency of the contract. Require a minimum of ten (10) days for legal review and evaluation of those listed documents. As in most jurisdictions, Idaho title insurance will not cover any negative impacts that public documents may have on the title or the use of land. Review the preliminary title report and the public record documents prior to undertaking other due diligence. Your real estate purchase and sale agreement calendar of performance must account for this document review, along with review of necessary environmental reports, estoppel certificates, and other contingent documents such as may be used in commercial, industrial, or agricultural land purchase contracts.
- Covenants, Conditions and Restrictions (CC&Rs) CC&Rs are equitable servitudes, which are private, contract-based land-use rules imposed upon all parcels in a residential or commercial subdivision. Equitable servitudes “run with the land” meaning that, regardless of whose name is on title, the land-use restrictions survive any subsequent owner’s conveyance to a successor owner. Equitable servitudes are generally required on every new subdivision in Idaho, whether inside or outside a municipality. Within the world of governing documents, only the CC&Rs “run with the land.”
- Articles of Incorporation. The Articles of Incorporation are filed with the Secretary of State by incorporated, private non-profits (homeowner or condominium) set up pursuant to Chapter 30 in Title 30 of Idaho Code. Chapter 30 of Title 30 of Idaho Code is a general private non-profit corporation statute. There is no separate statutory regime governing homeowner or condominium associations as may be found in other States. Without a separate statutory regime, the explicit wording of the governing documents will rule in each case. Idaho statutes also allows for unincorporated associations, so the Secretary of State may have no record of your governing association.
- Bylaws and Rules and Regulations. Applicable bylaws and rules and regulations are other documents you may encounter.
- Homeowner Association Records. Financial or other governing entity documents include meeting minutes of boards of directors and members, and financial statements of account. Even without a homeowners association, a simple three-member road or septic or water system maintenance agreement should have financial records related to that maintenance. You need to ask for those records for your review and approval within the due diligence period negotiated in your real estate purchase contract, or be ready to live with the results after close of escrow. Look for financial records of funds held in reserve to assure capital maintenance can be completed without surprise special assessments. Monetary reserves for capital asset maintenance or replacement are not required in Idaho. This means associations with physical assets to maintain, be they land or mechanical in nature are better served with a portion of association dues going toward a reserve account in an amount sufficient to service the land or replace the physical asset at its projected end of life.
- Hierarchy of documents. If you purchasing in a homeowner or condominium association, look for an explicit explanation in those documents about which document controls in case of a conflict between documents.
This posting is not legal advice. Legal advice is based on specific facts. This information is necessarily general in nature.