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Subject: The effect of a lawsuit against your HOA.
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MelissaP1
(Alabama)

Posts:8753


01/06/2013 3:56 AM  
Someone posted a good question about what would be the effect on a HOA after a lawsuit is filed or won.

There are several effects that could happen in a HOA due to lawsuits. I am going to post just a few off the top of my head to get started. I am sure other posters on here have had the experience on what happened after it happened to their HOA and will post it.

The question came up referencing mortgages... A HOA typically does not have any mortgages. The owners/members do. However, there is an effect on your ability to refinance or new owners to get loans. There is a HUD form that is filled out that works much like a HOA appraisal form. It is used by the mortgage lenders to gauge the health of the HOA. On that form there is a place for asking if the HOA is currently or has been involved in a lawsuit. The details of which must be provided. This information then is used by most likely the big three federally backed loan lenders. FHA, Freddie Mac, and Fannie Mae. Those are the MOST popular loan lenders that most people use in buying houses. However, they may be denied the loan and have to find another lender. A lender that will have higher rates or more stringent approval rules. Which means it will be harder to get approved buyers for the houses/condos in your HOA.

This will also go into refinancing areas. The rates of which will most likely go up due to the higher risks and costs of your HOA. The HOA will most likely have to raise dues or have a special assessment to cover the costs of the lawsuit or lawsuits. The bank has to factor in HOA dues much like utilities bills. So when they do a debt load ratio on you for approval your debt load just went up. Which then in turns pushes your rate up or denial of refinancing.

A claim also effects the HOA's credit rating. Yes, HOA's do have some kind of "credit rating". It's not exactly like your personal one. However, what it can do for a HOA is make it pay more for insurnace and loans. A HOA can apply for loans if needed. It is kind of rare but it does happen. A claim can effect that and make the loan a higher rate or denied. So the HOA can't really borrow money to help pay for their lawsuit pay outs if their credit rating bites it.

The most obvious result is losing your HOA's insurance altogether. They will cancel your insurance and can do so legally. The insurance company can also raise rates to the point the HOA can not afford it. It is extremely difficult to find new HOA insurance companies. There are only a few nationwide that even offer such insurnace. So if you got an insurer it's best to do the best you can to keep them.

The effect out of your pocket as a member? The HOA may have to raise dues or have a special assessment of course. The insurance only covers a certain amount of the award. A 1 Million policy does NOT pay out 1 million dollars. It roughly pays out about 80K if you read your policy. So if the court awards 100K then the owners would have to pick up the 20K difference. Keep in mind the lawsuit is against ALL of the members not just the board.

There is also some trickyness with the special assessment. Your HOA is going to have issues with people refusing to pay the special assessment. They didn't want to be part of the suit or were part of the suit. It doesn't exclude them from paying the special assessment. If they don't then your HOA will have to put a lien on their property to collect. A lien can be filed for not paying a special assessment. Which then means more money the HOA has to spend out to collect the money owed.

As you can see this is the real effect a lawsuit has on a HOA. You may want to sugar coat it with "I am right" but the reality is no matter how "right" you are, these are the results...Suing your HOA is suing yourself and your neighbors...Enjoy the higher dues, less ability to sell/refinance your home, and living with angry neighbors upset with having to pay the bill...Nice laugh eh?

Former HOA President
FredO
(California)

Posts:198


01/07/2013 12:24 AM  
OK so if all this is true and is known (or should be known) by every HOA and Board member, then why do so many HOA's end up having lawsuits?

Shouldn't the effects you mention be a surefire incentive for any board to sit down and work out issues with homeowners when they have a problem?

Even if the homeowner is mis-informed, isn't it better to work with them to avoid a lawsuit since the money saved is in every members best interest. I mean, most boards have a fiduciary duty to their members. Isn't it best served by avoiding litigation?

Yet, I have seen and read too many replies on this website where board members (like yourself for example) have stated that a board should go ahead and let a member sue since a response/counter suit costs little or nothing to file. ??? I mean, why the heck would any board let it even get that to that point??? This is where being neighborly looks like a good solution.

One has to wonder that there has to be just as many Board members as there are general members who are ignorant of their HOA's governing documents. And similarly, just as many board members who abuse power and become fanatical in enforcing rules or making up rules as they go.

This makes no sense as logic dictates that a board would have a greater incentive to avoid any lawsuit by any owner than the owner would. Yet, we see, hear and read about lawsuits being generated by HOA Boards against owners all the time.

To be honest, I think that many, many board members are unaware of the consequences of lawsuits on their community.

I find it ironic that an HOA will use the courts (file a lien) to take action when there is an issue but a homeowner is wrong to use the courts to seek fairness.

When someone states that a homeowner filing a lawsuit and suing the HOA hurts innocent victims (the rest of the general members) I have to call Bull Shit on that. The reality is that there are no innocent homeowners because if a Board is doing things wrong or illegal, it is the homeowners who elected the board and then fail to keep the board in check. When things get out of hand, all of a sudden the oppressed homeowner is the bad guy for using a lawsuit to protect his rights. Seems patently unfair and that you maybe are painting with a pretty broad brush in some cases.

I know that Boards and committees are populated with unpaid volunteers. One of the things they all have in common is that none of them are required to swear an oath for the job they take. Yet, the board members are entitled to D&O insurance coverage paid for by the entire membership. No risk there, not their money, no training and often times no ethics (just what I have seen in my dealings with my current HOA board over 11 years). I have read a few posts here where it has been said that many board members run for the board because they had a violation. I would say that everyone who runs for the board has an agenda (some good, some bad and so on). Along with that, it has been said that many board members are not prepared or do not understand the complexity of the job or the requirements on them.

I think that having to swear an oath for these elected offices would do a lot to sift the non prepared out of the mix.
MelissaP1
(Alabama)

Posts:8753


01/07/2013 3:06 AM  
It is a complicated situation. I posted what basically could be the effect of lawsuits on a HOA if you see issues when selling or purchasing in a HOA. These would be red flags. They are also something that happens slowly that many don't see the symptoms until they get effected.

I am of the opinion that many HOA's are over lawyered. That happens because of the lack of education and inability for many volunteer boards to understand what they are doing. It's the natural answer for many who suddenly find themselves on the HOA board: "Let's consult the lawyer". It is good intentioned to have a lawyer for a HOA but too much dependency situation develops. It can handicap a HOA and raise operating costs. Plus the advice isn't always correct or is misunderstood.

The truth is that 95 percent of the issues with a HOA are resolvable, changeable, and resolvable INTERNALLY. The rules are all set up so they can be changed/modified if the majority does not want them. They do allow for legal ways to collect money and enforce rules. The documents of the HOA is pretty much the "Bible" except that some people insist you need a preacher/priest to translate the information inside. (Lawyers=Preachers).

Lawsuits really are the LAST and MOST inefficient way to conduct business for a HOA board. Do they do it? Yes. Why? Because they don't know any better or they don't understand that the liening/foreclosing process is a much stronger/better option. It's just more long term than short term in a lawsuit. I always preach that lawsuits by a HOA is the worst route to go for multiple reasons. The first of course being that they allow people to move and leave the HOA without ever paying a dime of the judgement. Something a lien doesn't allow.

Now some states do require the HOA's recourse on certain areas to be resolved in court. Those areas are usually in the "fines". It's not related to unpaid dues. So it is possible the HOA is doing what it is supposed to do by taking members to court because that is the practice of their state for violation pursuits. Which throws a little bit of a wrench into the avoiding the lawsuit approach I admit. However, if that's the prescribed remedy for your state, then you have to go with it. If your so set on collecting fines on violations.

Overall a HOA should just avoid filing lawsuits altogether and go with the lien/foreclosure process instead. It has less of an effect than lawsuits. Until your BOD is sufficient and proficient in it's own workings and rules, your HOA will probably keep consulting lawyers and mounting suits. Until they learn that lawyers are TOOLS for the HOA to use and an legal extension since they can NOT practice law, then HOA's will continue on this lawsuit circle...One I hope people learn to avoid in the future.

Former HOA President
FredO
(California)

Posts:198


01/07/2013 10:32 AM  
I agree with you on the "over-lawyered" statement. We have a member of our board who is a lawyer. He is currently the longest running member of the current board. He has a very big ego (what's the difference between lawyers and God? Well, God doesn't claim to be a lawyer...lol)

His ego is clashing with the HOA retained Attorney. There are currently 9 or 10 possible pending lawsuits in the community. They are in various stages of the ADR process (mine included).

This guy is a current board member but acts like the president and undermines the president's authority all the time. Other board members defer to his decision on things. (because he is a lawyer and must be smarter than everyone else... lol) Makes for a sometimes very comical open meeting but is very sad in actuality.

I agree with you that 95% of issues within an HOA could be handled internally (without the courts). I would hazard a guess and say that maybe 99% (or more) could be handled this way. However, it has been my experience that boards refuse to admit wrong doing for fear of lawsuits and this makes a bad situation worse, which ultimately ends in a lawsuit. It is about accountability and taking responsibility for your actions. We often live by the theory that a Corporation can make no mistake. Therefore, they never admit mistakes.

What I mean by this statement is that we all know that Board members are unpaid (often untrained) volunteers. It is a foregone conclusion that mistakes will be made. Why not admit to it, apologize and move on. I think most people in an HOA would appreciate this. When we have ego's and pride play into it, you see small mistakes become big ones. It is human nature I guess but we're supposed to be bigger than that.

If they are acting in what they think is the best interest for the HOA, I don't think anyone would be put out of sort on it. A reasonable discussion, then a correction (if needed) and move on. But when we refuse to budge (or listen), it only makes matters worse and this results in possible lawsuits.





RicO


Posts:0


01/25/2017 7:20 AM  
MelissaP1
(Alabama):

From your expose, it appears that the HOA should do the "right thing" to prevent these "problems" don't you think?
MelissaP1
(Alabama)

Posts:8753


01/25/2017 7:38 AM  
They do the right thing by enforcing the rules by fines, liens, or foreclosure... Not sure what else more your looking for.

Former HOA President
AugustinD


Posts:2045


01/25/2017 7:54 AM  
Posted By FredO on 01/07/2013 10:32 AM
What I mean by this statement is that we all know that Board members are unpaid (often untrained) volunteers. It is a foregone conclusion that mistakes will be made. Why not admit to it, apologize and move on. I think most people in an HOA would appreciate this. When we have ego's and pride play into it, you see small mistakes become big ones. It is human nature I guess but we're supposed to be bigger than that.

If they are acting in what they think is the best interest for the HOA, I don't think anyone would be put out of sort on it. A reasonable discussion, then a correction (if needed) and move on. But when we refuse to budge (or listen), it only makes matters worse and this results in possible lawsuits.




I concur with FredO's analysis. Importantly, studies of medical malpractice cases show that when doctors and hospitals simply apologize to the patient, the chances of an actual lawsuit diminish significantly. See citations below. It seems to me this outcome is likely to apply to apologizing for HOA mistakes as well.

From 2014: http://www.physicianspractice.com/blog/apologizing-for-medical-missteps-whether-its-a-mistake-for-physicians

From 2011: http://www.uh.edu/~emliu/jru11/JRU_final.pdf

From 2008: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2628492/

From 2004: http://www.wsj.com/articles/SB108482777884713711



SheliaH
(Indiana)

Posts:2761


01/25/2017 8:31 AM  
So how to prevent problems? Communication and education would be a start.

First homeowners should be told the house they’re considering is in a HOA and what that means. I would like to see more realtors and perhaps banks make that information available to potential buyers, but potential buyers have to remember not everyone will be forthcoming with vital information because they want that sale, so they’ll have to educate themselves. There’s all sorts of information on the web (good and bad), so there really isn’t any reason why people can find this out. It’s not good to spend all the time and money into buying a house and not understand how much a HOA will affect it.

In nearly every post I’ve made on this board, I’ve always promoted homeowner and board member education. If you don’t know anything about reserves, association master insurance, conflict resolution or even what your own Bylaws and CCRs say, take the time to learn. I didn’t know much about HOA boards or how HOAs were run until I joined my own Board. Eventually, I found this site and joined CAI and started educating myself. I’m no longer on my board but still come here because I want to have more insight as to why our board does what it does (or not) and make suggestions.

Unfortunately, people don’t seem to want to take the time to find out information for themselves and just wing it based on whatever BS someone else (who knows ever less) has said, especially if it lines up with their own way of thinking. Not every situation in HOA-ville is addressed in the documents or state/local law – sometimes it’s a matter of using your noggin, LISTENING to the other side and thinking outside the box to find a solution.

Board members have to understand and expect not every homeowner will agree with every decision – they don’t have to. However the board must ensure that complete and accurate information behind the decision is made available. Most of the time, the homeowner will at least understand the thinking, and if they still disagree, have enough information to come up with another idea. A few will never agree with you – in that case, let them speak their piece and then move on and continue to make decisions that benefit everyone. Sometimes you have to let people rant and rave and burn themselves out, especially when they realize no one’s paying attention.

The problem starts when boards get this “circle the wagons” attitude and won’t say anything. Others have too much groupthink and/or the “we are the board and therefore we are” approach to any and all problems, thinking everyone else should just shut up and go along. Some board members simply love the title, but aren’t interested in doing any real work and certainly won’t bother reading anything to better understand the pros and cons of the vote they’re about to take. Then they get mad when anyone dares question them and start behaving like children, with the name calling, threats, etc.

On the other hand, homeowners get into trouble because they think “this is MY house gawddangit and I’m gonna do whatever the hell I want!” I see some of these stories about people suing over flags and mailboxes and always wonder if any of this would have happened if the homeowner had simply read his/her documents to see what was required. If a variance is needed, make your case and start with the assumption that the board members (some of them anyway) are reasonable people. When you come in with your hair on fire, cussing out everyone, calling them crooked, incompetent, etc., why would you expect them to listen to you? When you get a letter from the association, why not talk to the board first instead of running to the media yelling about tyranny of the bad ole HOA board?
JanetB2
(Colorado)

Posts:4168


01/25/2017 11:56 AM  
Posted By MelissaP1 on 01/06/2013 3:56 AM

There is also some trickyness with the special assessment. Your HOA is going to have issues with people refusing to pay the special assessment. They didn't want to be part of the suit or were part of the suit. It doesn't exclude them from paying the special assessment. If they don't then your HOA will have to put a lien on their property to collect. A lien can be filed for not paying a special assessment. Which then means more money the HOA has to spend out to collect the money owed.


That may not always be true ... in some states if an individual wins against the HOA they cannot be held accountable for the assessment for HOA legal fees. Potentially it is meant to keep down the number of lawsuits and insure people try to work things out. If a lawsuit is filed the petitioner (whether Owner or HOA) has most likely estimated a very high probability of winning, as they would not want to be responsible for all parties legal fees if they loose.

Posted By FredO on 01/07/2013 10:32 AM
What I mean by this statement is that we all know that Board members are unpaid (often untrained) volunteers. It is a foregone conclusion that mistakes will be made. Why not admit to it, apologize and move on. I think most people in an HOA would appreciate this. When we have ego's and pride play into it, you see small mistakes become big ones. It is human nature I guess but we're supposed to be bigger than that.

If they are acting in what they think is the best interest for the HOA, I don't think anyone would be put out of sort on it. A reasonable discussion, then a correction (if needed) and move on. But when we refuse to budge (or listen), it only makes matters worse and this results in possible lawsuits.


Very good point ... I would add stubborn to go along with ego's and pride.

Posted By SheliaH on 01/25/2017 8:31 AM
So how to prevent problems? Communication and education would be a start.

First homeowners should be told the house they’re considering is in a HOA and what that means. I would like to see more realtors and perhaps banks make that information available to potential buyers, but potential buyers have to remember not everyone will be forthcoming with vital information because they want that sale, so they’ll have to educate themselves. There’s all sorts of information on the web (good and bad), so there really isn’t any reason why people can find this out. It’s not good to spend all the time and money into buying a house and not understand how much a HOA will affect it.


Many states are requiring the disclosure as part of everyone's closing. I am hoping all states will require and if anyone's state does not you should start hounding your State Legislators. It is very irritating for a BOD's when people do not know they bought into an HOA and understand the consequences. SC is looking at adding HOA laws and this is an item they have been discussing:

"The panel was specifically tasked with reviewing five categories: whether HOA governing documents should be disclosed to homebuyers, education for homeowners and board members, manager certification, the time period of a developer’s control of an HOA, and the need for a uniform planned community act.

The panel did agree that HOA governing documents should be disclosed to prospective buyers, particularly for new home sales."

Read more here: http://www.thestate.com/news/state/article54217830.html#storylink=cpy
TimB4
(Virginia)

Posts:16550


01/25/2017 3:35 PM  
Posted By MelissaP1 on 01/25/2017 7:38 AM
They do the right thing by enforcing the rules by fines, liens, or foreclosure... Not sure what else more your looking for.




Melissa,

What you are failing to include is the fact that most legal actions are not from members against HOAs, but from HOAs against a single member - typically trying to enforce the rules and covenants.



MelissaP1
(Alabama)

Posts:8753


01/25/2017 4:10 PM  
I was not coming from that angle. It was to show what happens when one sues their HOA. The other way around has a similar effect and still reported on the HUD form. It is that ALL the members money is being used to pursue legal action against one. Which may be something not all believe in should be pursued.

I think HOAs should not sue their members for corrective actions or collections. A lien or foreclosure process is a much stronger approach than a lawsuit. Fines are not necessarily legally enforceable or collectible in all situations.

Regardless of which way a lawsuit goes, you are still suing yourself and your neighbors or using the HOA money to sue its member...

Former HOA President
TimB4
(Virginia)

Posts:16550


01/25/2017 6:01 PM  
One thing I would also like to point out is the consequences when an Association loses a case.

I've referenced the Farran case in previous threads.

In a nutshell, a member installed a sign that was too large (per the guidelines). The Association sent a warning letter and the homeowner cut the sign in half (now having two signs of the allowed size). The Association was not amused and started imposing monetary penalties. There were also issues over approval/disapproval of an architectural change that helped motivate the member. The case went to court, was appealed and finally went to the State Supreme Court. End result, the Association won some counts and lost some counts. However, they were also ordered to pay the members legal fees.

Combined with their own legal costs, the Association declared bankruptcy and had to sell some of their common area. Assessments went from $650 to $3,500 annually.


These are the reasons why we say to become involved and serve on your Board.

As one article (previously linked to) asks:

1) What was the board thinking spending $400,000 of the home owners' money in legal fees that can only be recovered if they win the dispute and if the owner does not claim bankruptcy then? How dare they commit the owners livelihood over silly disputes that can be handled over a cup of coffee.

2)Why didn't the home owners fire the existing board early on and take matters into their own hands?


RichardP13


Posts:0


01/25/2017 6:46 PM  
From first hand experience, there are times when a large lawsuit is hidden from the members.If someone does find out, they are characterized as a trouble maker. We even had a clause in the CCRs that required membership approval if the cost to litigate were to go over $2500.00. The attorney and management ignored the governing documents.

If the HOA is not transparent, financials generally are not available. How many people really read the year end annual reviews. I have dealt with my share of attorneys and PM's who deal with anyone who remotely questions their god given authority.

Said state of affairs when no one give a ****. I moved out of my HOA. Lucky too, because home sales and refinances have come to a halt as the HOA has a $20M lawsuit against them. They have $300K in delinquencies, can't figure out how to do a budget, gates don't work and when elections come along, no one wants to step up and take charge.

I have been involved in HOA's in many different capacities since 2009. I have never used the services of an attorney. As Tim said, a cup of coffee goes a long way in resolving simple issues.

But, if I were to sue my association, and I was very close, the $2M I would have sought would have cost me maybe $100.00 per year in increased insurance premiums. Small price to pay.

ReneeP3
(South Carolina)

Posts:42


01/26/2017 10:21 AM  
Reading this website evokes the same feelings I get when I read the Bible. Crap, OH Crap, OH Holy Crap.

SheliaH
(Indiana)

Posts:2761


01/26/2017 12:04 PM  
Our state did amend the HOA law last year requiring that buyers be advised that the house is in a HOA community at least 3 days before closing, I think. It's a start, although I would have said at least 7 days in advance. The state realtor association put something on its website about the new law, but I wonder how many really pay attention to it.

To wit - I exchanged a few emails with my former board colleagues over assorted issues, during which I said something about homeowners not being educated on what a HOA is. One (a former president and current realtor) said many of his clients are so excited about buying the house, they don't even think about the HOA part. At first, I thought "and I bet YOU don't bring it up either", but I'm giving him the benefit of the doubt because this board member set up the association website, which does have a message for realtors on our community being in a HOA and a brief statement as to what will be expected of the homeowner. So it's a start.

And let's not forget the SELLER in all this - it seems to me they should be held responsible for not telling the homeowner the house is in a HOA community? People yell at the realtor, the property manager and the HOA board, but it's the seller's house and one would think he/she lived there long enough to know there was a HOA and what's going on. Maybe sellers should be required to at least tell the buyer if the house is current with assessments, what exterior changes were made and if they were approved by the board. Instead the seller usually takes the money and runs, like everyone else, not telling the buyer that fence in the backyard wasn't approved by the association and it's about to send a nastygram ordering him/her to remove it or be fined.

And yes, this would include bank owned houses. The board member I mentioned above said "well, the banks don't always know the house is in a HOA." That may have been true when I brought my townhouse in 2001, but in light of the 2008 housing meltdown, I say BS - the legal department probably learned of an assessment lien filed against the house when they pursued foreclosure, so maybe they need to take the time to dig a little deeper as to what's behind it.
RicO


Posts:0


01/26/2017 12:30 PM  

SheliaH
(Indiana):

It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?
JohnC46
(South Carolina)

Posts:8867


01/26/2017 2:28 PM  
Posted By RicO on 01/26/2017 12:30 PM

SheliaH
(Indiana):

It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?




Many say do not answer a question that is not asked, especially in a sale situation.
GenoS
(Florida)

Posts:3362


01/26/2017 2:48 PM  
Posted By RicO on 01/26/2017 12:30 PM
It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?


In Florida, FS 720.401 provides that, "A prospective parcel owner in a community must be presented a disclosure summary before executing the contract for sale." The disclosure summary must provide some very specific information including the obligation to pay assessments and the existence of recorded deed covenants and restrictions. Have a look if you're interested. I find it hard to believe that other states do not require the same disclosure. It seems like a no-brainer.
RicO


Posts:0


01/26/2017 2:52 PM  
GenoS
(Florida):

I agree...
RicO


Posts:0


01/26/2017 2:55 PM  
The 2016 Florida Statutes:

Title XL
REAL AND PERSONAL PROPERTY

Chapter 720
HOMEOWNERS' ASSOCIATIONS

View Entire Chapter
PART II

DISCLOSURE PRIOR TO SALE OF
RESIDENTIAL PARCELS


720.401
Prospective purchasers subject to association membership requirement; disclosure required; covenants; assessments; contract cancellation.

720.402
Publication of false and misleading information.

RicO


Posts:0


01/26/2017 3:05 PM  

It is funny, but, we do NOT have this FL disclosure in AR...
Although we do have a "disclosure" statement and several of the questions, in good conscience, could require this disclosure...
TimB4
(Virginia)

Posts:16550


01/26/2017 4:15 PM  
Posted By RicO on 01/26/2017 12:30 PM

SheliaH
(Indiana):

It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?




VA also has a disclosure Requirement that is more extensive then FL, VA § 55-509.5

Our Association also includes additional information in the packet and has all governing documents available to anyone on our website.

However, it appears that most buyers still don't take the time to read it until there is a violation against them.
JohnC46
(South Carolina)

Posts:8867


01/27/2017 7:17 AM  
Posted By TimB4 on 01/26/2017 4:15 PM
Posted By RicO on 01/26/2017 12:30 PM

SheliaH
(Indiana):

It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?




VA also has a disclosure Requirement that is more extensive then FL, VA § 55-509.5

Our Association also includes additional information in the packet and has all governing documents available to anyone on our website.

However, it appears that most buyers still don't take the time to read it until there is a violation against them.




The above bold is also my experience.
SheliaH
(Indiana)

Posts:2761


01/30/2017 9:35 AM  
Posted By JohnC46 on 01/26/2017 2:28 PM
Posted By RicO on 01/26/2017 12:30 PM

SheliaH
(Indiana):

It seems to me that the Seller (and/or their Agent) of a Home located in a POA or HOA should be required, by law, to disclose that fact to the proposed Buyer(s), or their Agent(s), so they can check, before any purchase, if the Seller has complied with the rules, bylaws, and other regulations relating to the POA or HOA? Comments?




Many say do not answer a question that is not asked, especially in a sale situation.





You’re absolutely right and that’s why it’s vital that one has to find out what a HOA is and what that entails, so he/she will have some idea of what questions to ask. You have to go beyond “is this house in a HOA”? “Uh, yeah…” “Okie-doke” (thinking HOA is a type of block club that only holds holiday parties and sponsors a neighborhood watch).

Someone once said it’s a shame people seem to take more time buying groceries or a coat than buying a house (HOA or not) and the lack of knowledge of what they are falls right into that. Then there’s the false assumption that the HOA will do everything and you don’t have to do anything (all for a cheap, cheap price!) You certainly don’t have to worry about those rules - until someone rocks your world with a letter saying you can’t have that potbellied pig in your backyard anymore because it’s against rules or your mailbox has to be metal instead of wood.

Maybe it’s because of my work in consumer protection (1000 years ago, it seems!) but I’ve come to realize a seller’s primary objective is to sell and the more expensive the product or service, the more likely he/she will say damn near anything (or not) to make the sale. That’s not true in every situation of course, but people really need to look out for themselves and know what they’re getting into before walking through the door.
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Forums > Homeowner Association > HOA Discussions > The effect of a lawsuit against your HOA.



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