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Subject: HOA covenants were mistakingly left off of deed recently sold
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BrentS4
(North Carolina)

Posts:7


07/03/2016 9:21 PM  
Several lots were recently sold in my neighborhood. They were owned by the original developer. I am the President of the HOA. The new owner of these lots is ignoring our requests for him to submit building plans, etc. The neighborhood is demanding that I do something. However, the deed for these lots do not include or mention our restrictive covenants. I spoke to the seller (original developer) of these lots and he said he did not exempt these lots. When I told him the deed did not include our covenants, I have got no reply for the past month. I've listed what I believe my options are below. I am also awaiting legal consul from a lawyer.

1. I will pursue notifying the state general contractors investigation board. This new owner is listing his sister's and brother's names as general contractors on his building permits. Neither of them are licensed contractors in this state. Neither is the new owner. However, the new owner is renting these houses. It is NC state law that if a house is built by a non-licensed contractor, the house must be lived in by the owner/builder for 12 months before it can be rented or sold. The investigation board should be able to put a stop to his renting for at least 12 months.

2. I will pursue having the title agency who signed the new deeds update the deeds to include our covenants. I believe they made a mistake in their research and missed the fact these lots are within an HOA controlled subdivision and plat. It is my understanding if the owner does not like his new deeds, he can file a title insurance claim and back out of his purchase of these lots free and clear.

If option 1 and 2 don't work, I will pursue option 3.

3. Our common road is owned by the HOA. It is also listed as a private road on our street signs (PVT). I will pursue restricting access to our private road.
MarkM31


Posts:0


07/03/2016 9:39 PM  
#3 would probably never work, they would have an easement of necessity. You can't land lock a person out of spite, and in your case an earguement could be made that extortion is occuring if you give them a choice to either join up or kiss the road they have a easement to good bye.

#1 is just petty tattle telling too.
NpS
(Pennsylvania)

Posts:4216


07/04/2016 2:52 AM  
In most places, the developer file a plat with the recorder of deeds (or whatever that office is called) when the declaration is filed. That plat identifies all the lots that are subject to the declaration.

Your first step should be to check with the recorder of deeds to make sure that what the developer told you is accurate.

1. If you want to stop them from renting, you will probably have to sue.

2. Don't think they will have the option to back out of the purchase. They may be entitled to some compensation, but that battle is between the owner and the title insurer. What the title insurer has an obligation to do is to defend the title against a legal challenge. So, here again you will probably have to sue.

3. You probably can't restrict access. But your state law may allow you to charge them for use of the roads. Once again a lawsuit may be your only remedy.

Sikubali jukumu. Read all posts at your own risk.
TimB4
(Tennessee)

Posts:17830


07/04/2016 4:05 AM  
Brent,

Believe it or not, what you describe does occur.
Recently we had a poster from TX where several lots within their Association was not under any covenants.
I know of an Association that the Builder created different covenants for each phase of the development. Hence, they have to try and manage 5 different sets of covenants.


You, or you should have your attorney, do a search to see if covenants are or are not attached to that deed and, if they are, what those covenants specify.

Once you know this information, you need to consult with an attorney. The fact that there is a private road should require the individual to contribute some assessments even if there are no covenants. You will need legal advice to see what the Associations options are regarding the private road.

If there are no covenants attached, the best the Association can do concerning construction is to keep the city/County after them.

Hope this helps,

Tim
BobD4
(up north)

Posts:956


07/04/2016 7:04 AM  
Posted By BrentS4 " . . . I am also awaiting legal (counsel) from a lawyer. . . 3. Our common road is owned by the HOA. It is also listed as a private road on our street signs (PVT). I will pursue restricting access to our private road.



BrentS4 N Carolina : Good advices above. You labelled your topic "HOA covenants were mistakingly left off of deed recently sold". But was it really an oversight ?

1- Respectfully it's worth considering that some disputes have arisen & been litigated where associations MISTAKENLY believed that - within their vicinity - development sales by their same original Declarant or its assignee were lawfully subject to the same CCRS/title restrictions.

Your legal counsel should be able to clarify such after reviewing the boundary documents, actual transfer documents and registered environment.

Further, unless your jurisdiction unusually follows the Positive Covenant Rule ( where financial and/or labour burdens must be expressly chain-transferred from transferor to transferee or else remain with the transferor ) the duty obligations might not have been jeopardized by something believed omitted within a specific agreement of sale/purchase.

2 - The advice about NOT even considering a blockade is particularly good, as witnessed by police interventions here where unilateral shutdowns of SOLE ACCESS were attempted as part of boundary encroachment disputes.

3 With counsel you will have some weapons to discourage mortgage lending, put the heat on title integrity etc . . .

Good for you for picking this up. Good luck
NpS
(Pennsylvania)

Posts:4216


07/04/2016 7:30 AM  
Posted By BobD4 on 07/04/2016 7:04 AM
Further, unless your jurisdiction unusually follows the Positive Covenant Rule ( where financial and/or labour burdens must be expressly chain-transferred from transferor to transferee or else remain with the transferor ) the duty obligations might not have been jeopardized by something believed omitted within a specific agreement of sale/purchase.

Interesting point Bob.

Sikubali jukumu. Read all posts at your own risk.
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