Buying or Selling a Home/HOA Disclosure

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Expert: - 10/8/2008


Question
Hi,
My son bought a house in a HOA and he never received the Disclosure package. At the time of closing he signed a paper that he is aware that there is an existing HOA violation and he will correct it. Five days prior to closing HOA submitted a law suit against the seller (GMAC) stated the violations.  My son bought the house, he was not aware about the law suit, he corrected the violation and HOA requested an inspection. He was not available for the inspection and the HOA decided to send him two bills for legal fee, amount $1,500. More than they added his name to the defendant list on the case they opened 5 days prior to closing. What he should ? This is unbelievable. Please advice

Answer
Hello Mary - First, he should seek legal counsel. Specifically from an attorney with HOA/real estate experience. Depending upon the state in which the property is located the seller might have been required to disclose the existence of the law suit during the escrow period since this was not part of the original negotiation. Also, the title/escrow company would normally have notified the HOA of the transfer of ownership and the HOA then should have notified escrow of the pending lawsuit. In either case, disclosure being the key. It is reasonable that the HOA would have requested proof/inspection to validate the repairs/compliance. Usually most HOA complaints are on the exterior of the home therefore not requiring the homeowner to be present at the inspection. If the compliance was met a simple photo with a copy of the front page of a newspaper would have sufficed documenting the date and repair. As far as adding the new property owner to the complaint that is more than likely an appropriate action as he is the new homeowner although if it is after the time at which the compliance was met then this may be considered inappropriate. Remember, people can file a lawsuit for any reason against anyone. Of course the burden of proof falls upon the plaintiff/complainant not the defendant/respondent. In AZ, the escrow company is the responsible party for presenting the CC&R's to the buyer. Depending on the purchase contract that was used would determine the timing of when this document was required to be presented to the buyer. The document your son signed may or may not liable him to the legal fees. That would depend on the wording in the 'paper' agreement/addendum. There may be some additional liability on the real estate agents for failing to disclose pertinent facts that would affect the consideration paid for the property. The seller/listing agent/ or title company should have known about this. That said, this is a legal matter not a real estate question. I am not a real estate attorney and therefore this is not to be considered legal advice. As aforementioned I recommend a real estate attorney. This is not a time for inexperienced assistance or advice from outside the legal profession. You need quality legal representation as soon as possible. I wish I could be of additional assistance but the above information will assist you. The information provided is to be considered real estate knowledge that any professional REALTOR should be able to provide. I hope this provides you with additional information that you can apply to your situation. Please reply if I can answer any additional questions. - Todd

Buying or Selling a Home

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Todd C. Menard

Expertise

National Association of Realtors Code of Ethics and Professional Standards * Contract Questions: 05/05 Arizona Real Estate Purchase Contract, Exclusive Buyer Broker Contracts, Listing Contracts and associated contract documentation as it relates to boilerplate, covenants, contingencies, procedures and procedures. * ARMLS Arizona Regional Multiple Listing questions * Real Estate Professional Standards and Practices, Ethics, Obligations, Duties * Agency relationships in Arizona, Procurring Cause * Questions typicaly arising during the listing period * Questions typically arising during the escrow period * Questions about working with a real estate agent/REALTOR * Questions Related to New Home Builders

Experience

National Association of REALTORS Board of Director (2011) Arizona Real Estate Salesperson License (1991-1995), Arizona Real Estate Brokers License (1995-Present), Arizona Association of REALTORS Board of Directors (2008-Present), Arizona Association of REALTORS Professional Standards Committee (2008-Present), AAR Certified NAR Code of Ethics and Professional Standards Instructor, Southeast Valley Regional Association of REALTORS President-Elect (2011) Southeast Valley Regional Association of REALTORS Board of Directors (2008, 2009), Southeast Valley Regional Association of REALTORS Grievance Committee Chairperson (1998-2007), Southeast Valley Regional Association of REALTORS Bylaws Committee (2008-Present), Southeast Valley Regional Association of REALTORS Education Committee (2008), Arizona Association of REALTORS Forms Committee - Residential Purchase Contract (2005), Arizona Association of REALTORS Forms Committee - Residential Rental Agreement (2008), Arizona Association of REALTORS Forms Committee - Buyer Broker Agreement (2009), Arizona Association of REALTORS Presidents Advisory Group, Road to Professionalism (2009), Arizona Association of REALTORS GRI Curriculum Review Committee (2009), Arizona Department of Real Estate, Commissioner's Education Advisory Group Sub-Panel B (2010) Arizona Department of Real Estate, Commissioner's Statute and License Review Committee (2007)

Organizations
National Association of REALTORS, Arizona Association of REALTORS, Arizona Real Estate Educators Association (AZREEA), Arizona Regional Multiple Listing System (ARMLS), American Notary Association, Southeast Valley Regional Association of REALTORS (SEVRAR), Southeast Valley Regional Association of REALTORS Women's Council of REALTORS (2010-Present), Phoenix Association of REALTORS (1994-2000, 2005-2009), Scottsdale Association of REALTORS (1994-2000, 2005-2009), Maricopa/Glendale Association of REALTORS (1994-2000, 2005-2009),

Publications
"Real Estate in 2008"- Lifebushido Publishing (Contributory Author), SEVRAR Magazine, Internet Crusade, RealTown ListServe, Blogger.com, Active Rain

Education/Credentials
- AAR Certified Ethics and Professional Standards Instructor, Graduate REALTOR Institute (1993), Certified Negotiation Expert (CNE), Over 100 Hours of annual real estate continuing education, Annual Ethics and Professional Standards Development Workshops as required by the National Association of REALTORS, Approx. 36 hours of NAR Code of Ethics training annually, Numerous IDW, Seminars and Train the Trainer programs, Business Management Degree - 1981

Awards and Honors
2009 REALTOR of the Year Award, Southeast Valley Regional Association of REALTORS (10,000+ Members), Double Platinum Production Award ($45,000,000 Sales Volume)- Keller Williams Realty Int'l (2001), Top 15 Sales Production Keller Williams Realty International (2001), Top 5 Sales Producation Keller Williams Realty Southwest Region (2001), Top Recruiter Award - Keller Williams Realty Int'l, SW Region (2002), Who's Who in U.S. Executive (1983), Who's Who in U.S. Real Estate Professionals (2007)

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