No Escrow Demand Letter!!

Started by TyeG1 • 9 replies • 4011 views

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TyeG1 (Washington)
Posts: 3

Posted:

What can you do if escrow is ignoring our covenants and will not send a demand letter asking for the certificate outlining capital contributions and back dues that need to be paid? I Thought this was standard procedure and a requirement of the title/escrow's responsibility, can i go after them some how if they are not paying?

TimB4 (Tennessee)
Posts: 21,047

Posted:

Tye,

You can go after the previous owner if they still owe unpaid assessments when they sell.
As you know, the new owners start paying assessments after they close the sale.

The escrow/title company only processes paperwork and has zero financial obligation to the Association.

Is it possible that contact info for your Association is incorrect?

MelissaP1 (Alabama)
Posts: 13,836

Posted:

It's a little unclear on what your asking. I don't know of any responsibility the Escrow would have in this matter. Was there a lien against the former owners for back dues and this wasn't caught by the Title company when you bought? That's the only connection I can see there could be an issue. Otherwise, you as a new owner are NOT responsible for the past dues of the previous owner.

There are HOA who are confused on this issue. They may try to get you to be responsible for those past dues. However, depending on the situation and the laws of your state, this isn't allowed. Would need more details to find out if this is the situation or not. That would be very helpful to know the direction of advice to give you correctly.

Former HOA President

TyeG (Washington)
Posts: 22

Posted:

if you have sent the previous owner to collections are you able to still lien the property after the home has been sold!!

There is a Transfer fee that is to be paid on the purchase of any lot in the Association and escrow has not paid it.. so now what!

MelissaP1 (Alabama)
Posts: 13,836

Posted:

I don't think the escrow is responsible for this. Escrow usually covers things such as Property Taxes and Insurance. It doesn't cover HOA fees or dues. It sounds like this transfer fee could be your responsibility to pay. However, I would read the CC&R's to find out what this transfer fee is and applied. The CC&R's are considered PUBLIC documents and if you don't have a copy you can find it at the Records department of your local courthouse.

Still think your applying things to Escrow that it doesn't cover.

Former HOA President

TimB4 (Tennessee)
Posts: 21,047

Posted:

Tye,

You may on lien, in accordance with State laws, property that belongs to the individual owing the money.

Once the property is sold, you can not lien the property for the previous owners debt. That should have been done prior to the property being sold.

As for the transfer fee, who is supposed to pay it (the seller or the buyer)?
If it's the buyer, you may certainly send a bill to the new owners. If it's the seller, you will need to track them down and send them a bill. If they refuse to pay you may seek a judgement in court. If you win that judgement, you may be able to lien their new property.

It's also possible that the closing company did collect the fees but did not send them to the Association. You should request a copy of the HUD1 document used in the Sale to see if the fees were accounted for. The new owner might be able to assist you on this.

As a side note: escrow and closing costs are two different things. If you use the wrong terminology, the person you are speaking to might not understand what you are asking for.

Closing costs may include transfer fees, past due assessments, advance escrow payments, etc.

Escrow is an account the lender establishes to pay property taxes and homeowner insurance. An escrow account does not pay HOA fees.

Whomever does finalizes the deal (an attorney, title company, bank, etc.) will prepare the HUD1 document that shows all the closing costs and who (buyer or seller) pays them. They will then collect the money and pay whomever the closing costs.

Tim

TyeG (Washington)
Posts: 22

Posted:

How do you add terminology to the declaration so it shows a transfer fee is due!

Is there some boilerplate language that i can add to my declaration for an amendment to the declaration by proxy..

TimB4 (Tennessee)
Posts: 21,047

Posted:

Quote:

Posted By TyeG on 12/06/2011 5:51 PM
How do you add terminology to the declaration so it shows a transfer fee is due!

Is there some boilerplate language that i can add to my declaration for an amendment to the declaration by proxy..

Amending your Declaration of Covenants, Conditions and Restrictions (CC&Rs) is dependent on the language within those documents and any applicable State laws.

We don't have transfer fees, so I can't offer you some sort of language.

Are you saying that your Association charges transfer fees and your Documents are silent on the authority to charge those fees?

TyeG (Washington)
Posts: 22

Posted:

The language is absent and i think i can snap something together fairly easily, just looking for a template or maybe another Declaration with the language that i can do a quick hack & past job on to satisfy!!

Nothing has been charged to date.

I am in WA by the way.

TimB4 (Tennessee)
Posts: 21,047

Posted:

I just did a search for "HOA transfer fees Washington State" and came across an article by an attorney titled New Washington Laws Affect Private Transfer Fees, Resale Certificate Charges, and Reserve Study Obligations .

Per the article, anything requiring transfer fees recorded after 4/13/2011 is non binding. It's possible that you didn't receive the transfer fee because it is not legal to collect them.

Here is a link to Chapter 64.60 RCW
Private transfer fee obligation act.

I don't know the laws of Washington State well enough to offer additional advice. You might want to contact your Associations attorney on how this new law affects your Association.

Tim

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