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Subject: Illegal Hoa In florida
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DavidB31
(Florida)

Posts:21


12/05/2012 11:46 PM  
Hi everyone, I recently purchased a property in Florida, the president of the hoa owns 4 of the 6 units that make up the hoa. I called the hoa president to get details on hoa fees, by-law and such, she hung up on me 2x while stating she doesn't know about the sale, so she can only speak to the owner. while searching the state corporation website we notice that the hoa has been in ADMIN DISSOLUTION FOR ANNUAL REPORT since 2010. Today I got a letter from an attorney asking for 12 months of pass due maintenance fee pls $700 in additional fees, I've owned now for 2 months and was told on the closing statement that all fees were up to date. Base on what I was told by the other owner, it seems we have a president that does what she wants when she want. How should I Proceed to get copies of the by-laws, budget and what can be done if the association if not a legal Florida corporation?
GlenL
(Ohio)

Posts:5491


12/06/2012 12:11 AM  
We don't normally offer legal advice but I'm going to make an exception in your case. GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY!!!

Why you would buy into someplace where one person owns 2/3rds of the property always making you a minority is beyond me. That said, did you have an attorney at the closing to explain all of your rights and responsibilities and to make sure there were no outstanding fees on your purchase? If not get one ASAP or sooner. You may in fact owe these fees and have to sue your seller for some or all of them.

You need to read the statutes concerning condos in Florida, they can be found here: http://www.flsenate.gov/Laws/Statutes/2012/Chapter718 In it you can find how to request specific documents. Don't count on the fact that the corporation was AD to protect you, all she would need to do is file a few forms to cure that problem.

To reiterate: GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY, GET AN ATTORNEY!!!

Studies show that 5 out of 4 people have problems with fractions
DavidB31
(Florida)

Posts:21


12/06/2012 12:58 AM  
Thanks for the fast reply, I didn't know they owned 2/3rd until after the purchase, these are investment properties and are all rented out to tenants, it seems she is more upset that the previous vp/Secretary sold the unit while she was away and she didn't get the chance to buy it. I had an attorney and title insurance so we are looking into that now. I don't want to pay $2500 in fees if its going directly to her pockets. I'll make a formal request for the by-laws and budget tomorrow and see what response I get.
GlenL
(Ohio)

Posts:5491


12/06/2012 1:07 AM  
Sell it to her and get while the getting is good.

Studies show that 5 out of 4 people have problems with fractions
DavidB31
(Florida)

Posts:21


12/06/2012 1:09 AM  
lol, I'm so stubborn I wouldn't sell to her, I would sell anyone else but her, does her owning 2/3 give her 1 vote per unit or is it just 1 vote?
TimB4
(Virginia)

Posts:16681


12/06/2012 3:40 AM  
David,

Being administrativly dissolved did not dissolve the Association. It dissolved the Corporation known as HOA,Inc. An Administrative dissolution is typically easily resolved by paying additional fees and filing proper paperwork. Therefore, it's a concern because the Board overlooked filing paperwork but it doesn't really prevent the Association from doing anything.


As for the attorney's letter, you are not responsible for debts owed by the previous owner.

Depending on the language in the letter, you may want to contact an attorney and pay him a couple of hundred to write the response for you (based on what you posted, this may be the best solution).

However, if you feel comfortable with it, I would suggest responding to the letter explaining that you purchased the property on mm/dd/yyyy and have been trying to get a copy of the governing documents and payment information for assessments. Mention that you are not responsible for the previous owners debt or legal/collection fees associated with it but understand you are responsible for assessments from the date of purchase forward.


CarolF
(Florida)

Posts:433


12/06/2012 3:42 AM  
She has 1 vote per unit.
LarryB13
(Arizona)

Posts:4099


12/06/2012 10:12 AM  
David and Tim,

Dissolution of the corporation is more problematic than it may seem at first glance.

Typically the covenants will state something to the effect that there shall be the ABC Homeowners Association and that it shall be operated as a non-profit corporation.

So, what happens if the HOA is never incorporated? What if it is incorporated but the developer incorporates it as a for-profit corporation? What happens, as in this case, if the non-profit association is administratively dissolved? In each of those cases, the HOA does not conform to the covenants, which are its sole source of authority. The association has no independent authority to operate as an unincorporated organization.

I actually have an Arizona corporation that has been administratively dissolved. A dissolved corporation may be reinstated for a period of time (5 years in my state). While it is dissovled, the corporation may not carry on any business activities except those that are necessary to wind up the affairs of the corporation.

If the HOA has been administratively dissolved and if Florida laws are similar, then the HOA would have no lawful authority continue its normal business. It could not collect assessments (except for those that were owed prior to dissolution) nor can it spend money. The only lawful activity would be to pay off debts and sell off its assets.

Assuming that the dissolution of the association came about because the directors and/or officers failed to file some required reports with the state, those officers and/or directors may be personally liable to the members for their breach of fiduciary duty. In this case, Madame Mrs. President may be forced to cough up a wad of dough to cover the association's losses. This should be an interesting lawsuit if it ever goes that far.

Before jumping for joy, keep in mind that there is case law that holds that, even when there is no formal association, those who use a common facility, such as a road easement, have a legal obligation to contribute to its maintenance.



JimD15
(Florida)

Posts:21


12/06/2012 11:42 AM  
I'll add my 2 cents although this maybe too late. The selling realtor must supply you with a copy of the HOA bylaws. Failure to do so can void a selling contract. Also too, the HOA president has a duty to supply you with a copy of the bylaws upon request. I do believe they must also supply you with a bank statement as to the assets and expenditures of the HOA if you request it. I'm not a lawyer but I've purchased 2 properties one governed by a conda HOA, the other a single family home hoa.

CarolF
(Florida)

Posts:433


12/06/2012 2:34 PM  
JimD - just curious if you got an actual bank statement, or a financial statement from the HOA.
PaulT6
(California)

Posts:409


12/06/2012 3:23 PM  
Posted By GlenL on 12/06/2012 1:07 AM
Sell it to her and get while the getting is good.





Messy, messy, if you are not planning on living there I like Glen's suggestion. There are always other investment properties. Being stubborn may cost you in the long run.

Paul T
DavidB31
(Florida)

Posts:21


12/06/2012 9:14 PM  
I have an appointment with a attorney Monday morning. I got that property at a great price with 30% cap return, no way i'm going to let her push me out the door. I'll update you guys as we move along.
TimB4
(Virginia)

Posts:16681


12/07/2012 3:43 AM  
Posted By LarryB13 on 12/06/2012 10:12 AM

Dissolution of the corporation is more problematic than it may seem at first glance.




Larry,

I do agree that it is certainly more problematic than I initially posted.

As I understand it, an unincorporated association is not considered a legal entity. Only a legal entity may enter into contracts, etc.

However, just as the CC&Rs may require the Association to be incorporated, it's those same CC&Rs that creates the Association, authorizes it to enforce covenants and collect assessments and requires the member to pay the assessments. Therefore, incorporated or not, these things would still be authorized.

Again, as I understand it, not being seen as an "entity" in the eyes of the law should prevent the Association from filing liens, filing legal action or entering into new contracts. I say should prevent.

In reality, a service provider (landscape, trash, etc.) will likely enter into contract without checking the status of the Association. The clerk will likely file the lien without checking the status of the Association. As long as the bills are paid, insurance policies will likely be renewed. etc. etc.

However, if something goes wrong and issues are challenged in the courts, an unincorporated Association may have some problems (what type, I don't know as I'm not a lawyer).

Larry, you have/had owned corporations. Is my understanding on the "reality" of being administratively dissolved correct?

Tim
LarryB13
(Arizona)

Posts:4099


12/07/2012 5:36 AM  
Tim,

I am making an assumption that all states treat administratively dissolved corporations in a similar manner. By law in AZ, when a corporation is administratively dissolved the corporate shell continues to exist and the powers and duties of the officers and directors are unchanged. The big change is that the corporation is no longer permitted to "do business." It is supposed to wrap up its affairs unless it chooses to seek reinstatement. In winding down its business affairs, the corporation is still permitted to sue or be sued, among other things.

The problem I see here is trying to define what an HOA does when it "does business." In my mind, the association would have no power to levy assessments or collect any that came due after the date of dissolution. I do not believe that it would have the power to initiate a foreclosure action or lawsuit for monetary damages against members unless the money was owed prior to dissolution.

My best guess is that the BOD could still hold meetings and discuss issues but would be severely restricted in what it could do beyond that. My other guess is that if the association is reinstated that any assessments levied during the period of dissolution would be uncollectible forever.

I know that you and others are of the belief that the association exists even if it is dissolved. I disagree but do not know of any case law that would support either position. My view is that if I purchased property where the declaration states that I will be a member of ABC HOA, a non-profit corporation, then no one has the authority to insert some other association or form of association into the mix. I may have purchased the property specifically because it had an incorporated association that would shield me from liability. If the corporate entity is dissolved, I do not think property owners can be compelled to be members of an association with either a different name or different organization. As I said, I know of no authority to either support or refute that viewpoint.

TimB4
(Virginia)

Posts:16681


12/07/2012 7:40 AM  
Posted By LarryB13 on 12/07/2012 5:36 AM

The big change is that the corporation is no longer permitted to "do business."

The problem I see here is trying to define what an HOA does when it "does business."




Yep. I agree, that would certainly be the crux of the issue.


Posted By LarryB13 on 12/07/2012 5:36 AM

In my mind, the association would have no power to levy assessments or collect any that came due after the date of dissolution.

I know that you and others are of the belief that the association exists even if it is dissolved. I disagree but do not know of any case law that would support either position.




I can certainly see that an argument could be made for either side.

For me, the basis of my understanding is the fact that some States do have and allow unincorporated Associations to exist and operate (collect assessments, etc.). Therefore, I am concluding that if an incorporated Association (xyz HOA, Inc) was administratively dissolved that the Association (xyz HOA), like other unincorporated Associations, would still be able to collect assessments, pay bills, etc.. However, Like you, I also know of no case law that would support my position.

Again, I can see an argument being made on both sides (what an interesting legal battle that would be).


I was able to find the following:

2008 Article from CA law firm: What is the difference between an incorporated HOA and an unincorporated HOA? (scroll about 1/4 down the page to see this section)

Tim
FredS7
(Arizona)

Posts:919


12/07/2012 10:24 AM  
>Again, I can see an argument being made on both sides (what an interesting legal battle that would be).

A wild guess as to how this could play out- it ends up in court, the judge observes that the HOA can't do business, but there is business to be done, so he appoints a trustee to file the incorporation documents and run the HOA.
JimD15
(Florida)

Posts:21


12/07/2012 11:10 AM  
Carol,

I received both, a copy of the actual bank statement from the management company working for the Condo Association and a detailed copy of the budget from the single family home hoa.
DavidB31
(Florida)

Posts:21


01/14/2013 9:51 AM  
Quick update, we just got a letter from our attorney that the hoa board plan to void the sale because the seller (secretary of the hoa) did not present the sale to all board members as required by the docs. Also as a favor to us and to save us from a lengthy litigation they will buy back the unit from me at the price I paid for it.

Option1. Sue hoa board personally since they didn't file annual returns for years and not operating as a legal Florida corp.
Option2. Sell unit to hoa price paid (i've added 15k into the unit for repairs already) -(15k loss)
Option3. Sell Unit to hoa for Market price ( nice profit to be made)
Option4. List unit for sale and sue hoa & members if they try to block the sale.
MelissaP1
(Alabama)

Posts:9034


01/14/2013 10:05 AM  
Sell it and get out. If you choose to sue the HOA and you own the property then your suing yourself. If you don't own the property then you are NOT a member of the HOA and most likely don't have a case. I'd get out now and count yourself lucky.

Former HOA President
MelissaP1
(Alabama)

Posts:9034


01/14/2013 10:05 AM  
Sell it and get out. If you choose to sue the HOA and you own the property then your suing yourself. If you don't own the property then you are NOT a member of the HOA and most likely don't have a case. I'd get out now and count yourself lucky.

Former HOA President
DavidB31
(Florida)

Posts:21


01/14/2013 10:14 AM  
yep thats what I plan to do, being that she own 4/6 units most the cost of the lawsuit would fall on her, I currently own the unit So i'm going to list it at market price. Since the hoa has first right of refusal If they dont want to pay market price i'll just leave it on the open market. I also have title insurance but i dont think they would cover the renovation made to the unit since purchase.
TimB4
(Virginia)

Posts:16681


01/14/2013 10:22 AM  
Option 5 - Seek legal advice (if not already done so).


I'm not sure that the Association has the authority to void the sale after closing (but I am not a scholar of FL statutes). Personally, if I were in the situation you were in (1 person controlling the votes - hence you have zero say), I would want out of it.

I would certainly insist on market price vs. what you expended. I suspect that there were improvements (even if it was a coat of paint and cleaning)made by you and you should be compensated for that. However, you also need to consider the cost of your attorney and if the net will end up being just what you paid for it, then you may want to just settle on that.

TimB4
(Virginia)

Posts:16681


01/14/2013 10:28 AM  
David,

Forgot to add, thanks for the update.

Often people will post, debate the advice offered and never provide feedback if the advice used turned out to be helpful or not. I just wanted to say your update is appreciated.

Tim
LarryB13
(Arizona)

Posts:4099


01/14/2013 9:24 PM  
Posted By DavidB31 on 01/14/2013 9:51 AM
Quick update, we just got a letter from our attorney that the hoa board plan to void the sale because the seller (secretary of the hoa) did not present the sale to all board members as required by the docs. Also as a favor to us and to save us from a lengthy litigation they will buy back the unit from me at the price I paid for it.

Option1. Sue hoa board personally since they didn't file annual returns for years and not operating as a legal Florida corp.
Option2. Sell unit to hoa price paid (i've added 15k into the unit for repairs already) -(15k loss)
Option3. Sell Unit to hoa for Market price ( nice profit to be made)
Option4. List unit for sale and sue hoa & members if they try to block the sale.




At the time when you purchased, you were not a member of the association and not subject to the restrictions, including the requirement to offer it to the association first. Therefore, they have no cause of action against you but they do have a cause of action against the former owner.

Options three and four both sound good. Three would be great but you know the swamp witch is not going to pay market price if she can browbeat you into a lower price. Option 5: Announce plans to turn the unit into a halfway home for the criminally insane and let her spend herself into poverty trying to stop you in court.
KevinK7
(Florida)

Posts:1343


01/15/2013 4:01 AM  
Florida Statute in regards to administrative dissolution:

607.1421 Procedure for and effect of administrative dissolution.

(1) If the Department of State determines that one or more grounds exist under s. 607.1420 for dissolving a corporation, it shall serve the corporation with notice of its intention to administratively dissolve the corporation. If the corporation has provided the department with an electronic mail address, such notice shall be by electronic transmission. Administrative dissolution for failure to file an annual report shall occur on the fourth Friday in September of each year. The Department of State shall issue a certificate of dissolution to each dissolved corporation. Issuance of the certificate of dissolution may be by electronic transmission to any corporation that has provided the department with an electronic mail address.

(2) If the corporation does not correct each ground for dissolution under s. 607.1420(1)(b), (c), (d), or (e) or demonstrate to the reasonable satisfaction of the Department of State that each ground determined by the department does not exist within 60 days of issuance of the notice, the department shall administratively dissolve the corporation by issuing a certificate of dissolution that recites the ground or grounds for dissolution and its effective date. Issuance of the certificate of dissolution may be by electronic transmission to any corporation that has provided the department with an electronic mail address.

(3) A corporation administratively dissolved continues its corporate existence but may not carry on any business except that necessary to wind up and liquidate its business and affairs under s. 607.1405 and notify claimants under s. 607.1406.

(4) A director, officer, or agent of a corporation dissolved pursuant to this section, purporting to act on behalf of the corporation, is personally liable for the debts, obligations, and liabilities of the corporation arising from such action and incurred subsequent to the corporation's administrative dissolution only if he or she has actual notice of the administrative dissolution at the time such action is taken; but such liability shall be terminated upon the ratification of such action by the corporation's board of directors or shareholders subsequent to the reinstatement of the corporation under ss. 607.1401-607.14401.

(5) The administrative dissolution of a corporation does not terminate the authority of its registered agent.

Basically, from my understanding, the HOA cannot do anything except pay their debts and notify people of outstanding and notify claimants of their situation. The board member would then become personally liable for the HOA expenses, and being that since it has been in dissolution since 2010, I would say that the owner is in a pretty precarious situation.

Sure you can sue, but if you want to be stubborn there is another option. If your covenants and restrictions explicitly state the name of the HOA as the HOA of the neighborhood and does not clarify how many votes a property owner receives, because the company has been dissolved for over 2 years you could legally register another corporation by that name and take control of the neighborhood writing the Articles of Incorporation and by-laws that individuals with multiple properties only receive one vote.

617.1422 Reinstatement following administrative dissolution.

(4) The name of the dissolved corporation is not available for assumption or use by another corporation until 1 year after the effective date of dissolution unless the dissolved corporation provides the department with an affidavit executed pursuant to s. 617.01201 authorizing the immediate assumption or use of the name by another corporation.

(5) If the name of the dissolved corporation has been lawfully assumed in this state by another corporation, the department shall require the dissolved corporation to amend its articles of incorporation to change its name before accepting its application for reinstatement.
SeanM7
(Florida)

Posts:4


01/15/2013 11:28 AM  
Posted By TimB4 on 12/06/2012 3:40 AM
As for the attorney's letter, you are not responsible for debts owed by the previous owner.





Wow, that is some dangerous advice! Without speaking as to the dissolution issue, you likely are responsible for the previous debts (assessments + interest + costs + attorney fees) related to the previous owner's delinquency. Both Chapter 718 (Condo) and 720 (HOA) of the Florida Statutes specifically provide for joint and and several liability of the debt amount to both the previous titleholder and ANY new titleholder (meaning BOTH of you are personally liable for the entire amount). This should have been made clear to you by the title company before closing (i.e. you should have gotten those debts paid off prior to your purchase or been credited for that amount as a reduction of your purchase price) so you may have a claim against the title company or the individuals involved in the sale or be able to seek an idemnification claim against the seller... but jeez it is concerning that folks would make a blanket statement that you are "not responsible for the debts owed by the previous owner". That statement literaly could not be anymore factually incorrect in the state of Florida.
TimB4
(Virginia)

Posts:16681


01/15/2013 12:32 PM  
Posted By SeanM7 on 01/15/2013 11:28 AM
Posted By TimB4 on 12/06/2012 3:40 AM
As for the attorney's letter, you are not responsible for debts owed by the previous owner.





Wow, that is some dangerous advice!




Yep, I agree that that was bad advice.

It was corrected in a different thread but never applied back to this thread. Thank you for correcting that for any future reader. FL law, specifically 720.3085 2(b), allows the Association to collect any unpaid assessments that accumulated prior to the sale from the new owner. It is then the new owners responsibility to collect from the previous owner. This is unique to FL (thankfully).


DavidB31
(Florida)

Posts:21


01/15/2013 1:34 PM  
I just spoke to another attorney and he made some suggestions.

1. Call title Insurance Company let them deal with legal fight.
2. Add a mortgage to the property since it was purchased cash ( incase they try to foreclose on me for hoa fees (they rejected payments so far))
3. Register a new corporation with the same name ( that would stall them even more from legal action)

To resolve this issue i'm going to just sell it at market price and move on, Something in me just want to fight, but in the long run its probably not worth it.
LauraR5
(Tennessee)

Posts:216


01/16/2013 6:45 PM  
David,

If they don't recognize you as the legitimate owner, will they recognize your sale to anyone but them as legitimate? I would hate for another person to be dragged into this nightmare.

I would definitely find a way to prevent them from foreclosing on you.

If this lady wants all the units, she needs to just buy them and make it an apartment complex. What a jerk.


DavidB31
(Florida)

Posts:21


01/28/2013 4:02 PM  
Update: she is still trying to play hardball, I've successfully created a new non-profit with the same name as the association, that should slow her down for a while. I offer her the property at market price and ill throw in the non-profit name. but she want to pay below market. My atty suggest we wait for them to make the next move. They should have a hard time suing me now since they can't renew the association corp. according to florida law, a condo association must be a corporation. The condo by-laws also refer to the condo by the corporation name. I'll update as things progress.
SeanM7
(Florida)

Posts:4


01/29/2013 6:39 AM  
With all due respect to how frustrating your situation has been for you, registering their INC name is nothing but an annoyance; it doesn't in any way hamper their powers as an association. They can just register a different corporate name and in the interim (before they register a new name, prior to them amending their docs to reflect the new name, etc) their operations are not hamstrung by the transition or lack of INC. Yes, they are required to be a corporation, but just because a period lapses doesn't make them powerless and, more importantly, it doesn't erase YOUR personal liability to that debt or your obligation to abide by their convenants. Sounds like you guys are now just in a good 'ol fashioned peeing contest.
DavidB31
(Florida)

Posts:21


01/29/2013 6:56 AM  
Posted By SeanM7 on 01/29/2013 6:39 AM
With all due respect to how frustrating your situation has been for you, registering their INC name is nothing but an annoyance; it doesn't in any way hamper their powers as an association. They can just register a different corporate name and in the interim (before they register a new name, prior to them amending their docs to reflect the new name, etc) their operations are not hamstrung by the transition or lack of INC. Yes, they are required to be a corporation, but just because a period lapses doesn't make them powerless and, more importantly, it doesn't erase YOUR personal liability to that debt or your obligation to abide by their convenants. Sounds like you guys are now just in a good 'ol fashioned peeing contest.




Yep, I just want to pee long enough for them to buy my unit at a fair price. Come to find out when she purchased 2 of her 4 units she did not record an approval letter from the condo with the county. How ironic that she is trying to null my sale for the same thing she is guilty of.
DavidB31
(Florida)

Posts:21


08/25/2013 9:53 PM  
Off to court we go, I listed the property for sale and got an offer, once the buyer call the Hoa to get an estoppel letter, they informed my buyer than i'm being sued due to violation of the first rights of refusal clause in the by-laws. A few days later we got served. I'll updated you guys with more info as the case progress, hopefully we get it dismissed on grounds of an illegal board.
GlenL
(Ohio)

Posts:5491


08/25/2013 10:26 PM  
David, thanks for the update and sorry you're going through this. I'm not an attorney nor do I play one on the interweb but while you're disusing this with the attorney you might ask him about petitioning the court to appoint a receiver. Will this cost you money? Probably but it could be argued that in addition to not having the corporate power to initiate the suit, she is using HOA funds for her personal gain and should be replaced by an independent source until everything is ironed out.

BTW Are you and your neighbor also on the Board because corporate laws in most states I believe (again not an attorney) prohibit a person from serving as both president & treasurer.

Studies show that 5 out of 4 people have problems with fractions
DavidB31
(Florida)

Posts:21


08/25/2013 10:38 PM  
The board is made up of husband wife and son, i'll mention to my attorney about petitioning the court. so far our defense is 1. The previous seller did give proper notice of sale, 2.selective enforcement, we found several items in the by-law that's being violated by all 3 board members.
DaveD3
(Michigan)

Posts:796


08/26/2013 4:03 AM  
What right of first refusal clause is in the bylaws? Seems unusual.
SeanM7
(Florida)

Posts:4


08/26/2013 5:18 AM  
Those clauses are actually rather common in Florida, and definitely enforceable as long as they were properly enacted. I've even seen some that have a first right of refusal for all tenancies. I find them to be way too restrictive, but I come across them often.

Selective enforcement generally only becomes a defense when a single covenant is only being enforced against some residents and not others, not in cases where certain bylaws are being enforced and others are not; the latter situation generally just renders those provisions unenforceable, for the most part. But you have counsel, so I'm sure they're making the best arguments they can.

Good luck with your situation!
JohnC46
(South Carolina)

Posts:9155


08/26/2013 7:58 AM  
Posted By DaveD3 on 08/26/2013 4:03 AM
What right of first refusal clause is in the bylaws? Seems unusual.




David

I am not nor do I play a lawyer.

Many older Covenants had this in them. It said the association had to approve any sale and the association could purchase your unit/home for the same price you had taken a sales contract on it for. Thus giving the association the right of first refusal. The association could not say no to the sale, but they could buy it for themselves.

Basically it was done to keep "undesirables" out.

KevinK7
(Florida)

Posts:1343


08/26/2013 12:11 PM  
Posted By JohnC46 on 08/26/2013 7:58 AM
Posted By DaveD3 on 08/26/2013 4:03 AM
What right of first refusal clause is in the bylaws? Seems unusual.




David

I am not nor do I play a lawyer.

Many older Covenants had this in them. It said the association had to approve any sale and the association could purchase your unit/home for the same price you had taken a sales contract on it for. Thus giving the association the right of first refusal. The association could not say no to the sale, but they could buy it for themselves.

Basically it was done to keep "undesirables" out.




So could you call the HOA's bluff? Arrange a sale for X amount and see if the HOA moves, and if not then go to the real buyer and "negotiate" a price less then X.
GlenL
(Ohio)

Posts:5491


08/26/2013 12:15 PM  
Kevin the problem is the president wants to void the original sale to the poster, who then put additional money into fixing it up.

Studies show that 5 out of 4 people have problems with fractions
JohnC46
(South Carolina)

Posts:9155


08/26/2013 12:36 PM  
Posted By KevinK7 on 08/26/2013 12:11 PM
Posted By JohnC46 on 08/26/2013 7:58 AM
Posted By DaveD3 on 08/26/2013 4:03 AM
What right of first refusal clause is in the bylaws? Seems unusual.




David

I am not nor do I play a lawyer.

Many older Covenants had this in them. It said the association had to approve any sale and the association could purchase your unit/home for the same price you had taken a sales contract on it for. Thus giving the association the right of first refusal. The association could not say no to the sale, but they could buy it for themselves.

Basically it was done to keep "undesirables" out.




So could you call the HOA's bluff? Arrange a sale for X amount and see if the HOA moves, and if not then go to the real buyer and "negotiate" a price less then X.





Kevin

Not that I agree with right of first refusal.

This tactic will not work as the approval would be a sale to John Smith as per the contract. You could not then switch to selling to Harry Jones. You would need a new contract and new approval.

GlenL
(Ohio)

Posts:5491


08/26/2013 2:19 PM  
David given that the owner who sold it to you was the vp/secretary and that under most documents the vp is in charge when the president is unavailable mean that you had the tacit approval for the purchase from the HOA since s/he didn't invoke the right of first refusal?

Studies show that 5 out of 4 people have problems with fractions
KevinK7
(Florida)

Posts:1343


08/26/2013 3:45 PM  
Posted By GlenL on 08/26/2013 12:15 PM
Kevin the problem is the president wants to void the original sale to the poster, who then put additional money into fixing it up.



Ah. I just meant in general but I am interested in hearing any conclusion for this situation.
KevinK7
(Florida)

Posts:1343


08/26/2013 3:51 PM  
Posted By JohnC46 on 08/26/2013 12:36 PM
Posted By KevinK7 on 08/26/2013 12:11 PM
Posted By JohnC46 on 08/26/2013 7:58 AM
Posted By DaveD3 on 08/26/2013 4:03 AM
What right of first refusal clause is in the bylaws? Seems unusual.




David

I am not nor do I play a lawyer.

Many older Covenants had this in them. It said the association had to approve any sale and the association could purchase your unit/home for the same price you had taken a sales contract on it for. Thus giving the association the right of first refusal. The association could not say no to the sale, but they could buy it for themselves.

Basically it was done to keep "undesirables" out.




So could you call the HOA's bluff? Arrange a sale for X amount and see if the HOA moves, and if not then go to the real buyer and "negotiate" a price less then X.





Kevin

Not that I agree with right of first refusal.

This tactic will not work as the approval would be a sale to John Smith as per the contract. You could not then switch to selling to Harry Jones. You would need a new contract and new approval.




I'm sure one proficient in contract writing and law could create a contract stating that there is a signing discount should the party controlling the first refusal choose to pass (John will sell to Peter for 100,000 with a discount for buying should the first refuser refuse. So either the HOA pays 100,000 or Peter buys a house for 80,000).

I'm sure there are legal loopholes around it, especially if you had a crafty lawyer.
DavidB31
(Florida)

Posts:21


06/28/2014 1:30 PM  
UPDATE: we went to mediation and they settled, it ended up costing me almost 7k in attorneys fee. We both agreed to drop all lawsuits and move on, In the end it was worth fighting as this president was being a bully and wanted the unit. I had to pay all the back hoa fees and special assessments that took place while I owned the unit.
KevinK7
(Florida)

Posts:1343


06/28/2014 4:54 PM  
Posted By DavidB31 on 06/28/2014 1:30 PM
UPDATE: we went to mediation and they settled, it ended up costing me almost 7k in attorneys fee. We both agreed to drop all lawsuits and move on, In the end it was worth fighting as this president was being a bully and wanted the unit. I had to pay all the back hoa fees and special assessments that took place while I owned the unit.




Thanks for the update. I would be interested in knowing more of the details of your situation because all I know is what you had originally posted. What really bothers me is the cost of the whole matter. I remember reading somewhere that the average cost of mediation can be around $10k and that the state sort of pushes people to mediate before advancing to court.

So what did the HOA compromise on?
SeanM7
(Florida)

Posts:4


06/29/2014 8:17 AM  
Posted By KevinK7 on 06/28/2014 4:54 PM
Posted By DavidB31 on 06/28/2014 1:30 PM
UPDATE: we went to mediation and they settled, it ended up costing me almost 7k in attorneys fee. We both agreed to drop all lawsuits and move on, In the end it was worth fighting as this president was being a bully and wanted the unit. I had to pay all the back hoa fees and special assessments that took place while I owned the unit.




Thanks for the update. I would be interested in knowing more of the details of your situation because all I know is what you had originally posted. What really bothers me is the cost of the whole matter. I remember reading somewhere that the average cost of mediation can be around $10k and that the state sort of pushes people to mediate before advancing to court.

So what did the HOA compromise on?




Mediation itself is actually not that expensive at all. Most mediators charge somewhere around $150-$250/hr and it goes usually for 2-4hrs. Now, most people hire attorneys for mediation which of course balloons the cost as they're going to spend several hours getting up to speed on the case, draft a pre-mediation statement, then prep for and attend the mediation, all at $250-$300/hr. But there's no requirement to have an attorney; in fact, one could argue mediation is meant to be done INSTEAD of having to hire an attorney. That $10k figure has no basis.

To the OP... glad you got your situation resolved. Sorry to hear it cost you $7k.
KevinC13
(Florida)

Posts:2


10/11/2019 7:46 PM  
I know I am late to the party but I am in a similar situation. I used to actually fill the forms, get the signatures and do the footwork for starting HOA's, but always as a new community or after the petitioning. When a group self appoints and uses code enforcment and LLeo as its teeth I am looking for what rights I have.

We always just did our own thing and if there was an issue we talked it out. They won't talk but expect you to live by their rules. But if you are in the in group you can do no wrong. and ther is no way to get ahold of the "HOA" since they do not really exist.
SueW6
(Michigan)

Posts:649


10/12/2019 5:29 AM  
This is an old thread but to add:
President/VP - ok
Secretary/Treasurer-ok
President/Secretary-not OK

I know of a lawsuit that got thrown out of court when it was discovered that one of the parties was not a valid corporation.
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Forums > Homeowner Association > HOA Discussions > Illegal Hoa In florida



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