Expert: Lisa Webber - 10/9/2009

Question
recently purchased a foreclosed property in a subdivision and were told by the closing attorney, that i paid, there was no hoa, 3 weeks later we were visited by the president of the association and informed that we owe hoa dues. there were no disclosures at closing and in fact the listing attorney did not even attend. am i obligated to pay dues or be involved since this was not disclosed, what is my recourse?

Answer
If there is a mandatory HOA, you must pay the dues or they can hire attorneys to collect the dues, tack on legal fees and then put a lien on your house.  With a foreclosure, you probably had to sign papers stating that it is an "as is" sale and they don't know anything about the property.  Banks do not disclose anything and it is pretty much buyer beware and up to you to do the research. If you had used a local Realtor, they would have been familiar with the area and would have alerted you to the fact that there was an HOA.  The person who listed the house would most likely have been a Realtor, not an attorney and yes, they normally do not attend settlements for foreclosures.  Banks hire a couple Realtors in each area and have them handle all of their foreclosures for them, sometimes a hundred or more at a time depending upon the area.  The Realtor is not just one person, but a team or office of people and they have a system that they follow to allow them to handle many properties at once.  They typically don't know much about each one and just take a picture, list them, and it's up to the buyers to do any research about the property including inspections as there are no disclosures. The bank representatives sign the paperwork outside of settlement, so there is no reason for any of their representatives or agents to attend.

You can certainly consult with a real estate attorney about this, but I do not think that you have any recourse as you did not have anyone working as an agent for you.  The attorneys were not working as your fiduciary, therefore they did not owe that due diligence to you.

I wish I had better news for you, but you probably got a great deal as foreclosures usually are.  Good luck!