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 allow 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. Examples of governing entity documents include minutes of boards of directors meetings and financial statements of account. Even a simple three-member road, septic, or water system governing board should have financial records related to maintenance. You need to review these records within the due diligence period or live with the results. Look for adequate reserves to assure capital maintenance can be completed without special assessments. Monetary reserves for capital asset maintenance or replacement are not required in Idaho. Associations with physical assets, land or mechanical, should dedicate a portion of association dues toward a reserve account to service the land or replace the physical asset at its projected end of life.
- Hierarchy of documents. If you are purchasing in a homeowner or condominium association, look for an explicit explanation about what document controls in case of a conflict between documents.
At Timely Contract, our primary legal services include: real estate contract review, real estate contract drafting, legal opinions for title insurance exceptions, and research, due diligence, and legal opinions for properties.
This posting is not legal advice. Legal advice is based on specific facts. This information is necessarily general in nature.
See related article about real estate contracts in Idaho.
At Timely Contract, we have local real estate attorneys who have experience throughout Idaho, including: Boise, Post Falls, Coeur d’Alene, Lewiston, Moscow, and Sandpoint.