Homeowner sells and doesnt disclose about dues and association

Started by SetenaN • 4 replies • 1653 views

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SetenaN (Georgia)
Posts: 23

Posted:

A homeowner sold her house in our community knowing she had dues, but apparently did not disclose this to anyone. We were never contacted for a closing letter but noticed that the deed had been filed with the courthouse. She owed dues from last year. What are the steps we need to take now that this house has been sold to collect the past dues? Is someone like a closing attorney or realtor supposed to know that we have an association even though the homeowner acts as if they dont owe?

Thanks-
Setena

RogerB (Colorado)
Posts: 5,067

Posted:

Setena, it depends on your state's requirements. In Colorado an assessment is against the property, not the owner. If the sale is covered by title insurance and was not listed by the title company then the current owner probably has recourse through them but still owes the amount due.

BrianB (California)
Posts: 2,820

Posted:

check out the laws in your state, but a rule of thumb is that you will still charge the property (and new owners) to recover the funds, and they in turn can sue the previous owner, title company, or sometimes, realtor (depending on laws).

I would suggest letting the new owner know at once the problem, give them some options, and communicate with them. make them feel like both they and the HOA are the voctims together, and working to make it right, rather than the HOA is the villan, and they are all alone as a victim.

ChadK (North Carolina)
Posts: 43

Posted:

Yep.

The property owes the money. Your association has a perpetual lein on the property that must be satisfied (usually anually in the form of dues).

The new owner has to pay if the don't want to be foreclosed upon. Works just like back taxes owed.

Now as for the new owner....they can and should demand payment from the old owner or title company. In the event that he has to sue to recover the money, most states provide for "Treble Damage" for non-disclosure on real estate deals. That means that the actual damages are awarded and multiplied by 3. I have seen it happen when the seller didn't tell bout termite damage that they knew about. Another case was a septic system needed replacing and the previous owner new about it and just sold the property without disclosing it. The new owner sued for damage ($10,000 for new system) was awarded it by the jury and was suprised to receive a check for $30,000. The treble damage is automatic. The seller would have to have prior knowledge of the dues owed for there to be shown malice or disregard. It can be proved by testimony from the board, minutes, copies of bills sent to the previous owner, etc..

JulieS (Georgia)
Posts: 412

Posted:

Laws vary by state. In Georgia, the assessment is tied directly to the homeonwer and not the property. We have a case where someone sold without a lien or payment received at closing. We have to track down this person and file against them personally. This is why Georgia now has a POA and we are hoping to change from an HOA to a POA so that we can collect dues on foreclosures, the new owners for past due amounts, and ability to foreclose for non-payment.

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