Fraudulent Association

We purchased property in a remote community that was advertised as having CCR's and an association. After our purchase we discovered that the "Developer" had simply bought up a portion of pre-platted lots in the remote community on tax sales. He then resold his lots with quit claim deeds and had the buyers sign ccr's which were not registered with the county with the deeds.

The community only has vehicle access through private logging roads. The roads inside the community are actually abandoned county right of ways which were not previously developed.

The "developer" actually excavated roadways, drainage systems and lots, and he built and sold cabins without holding a contractors registration and without holding a business license.

The supposed "association" lots are interspersed and surrounded with "non association" lots. some association lots are located on roadways not even maintained by the association.

The association entrance road is cut through the private property of a non association member who has threatened to us that he may dig up the road and post no trespassing signs.

The "developer" worked out an arrangement with the logging companies that allows only the association members to get keys from the logging companies for the gates leading to the development which forces the landowners to pay the association or be locked out of their properties.

We have actually spoken to a land owner who owned their land prior to the "developer" buying and selling his "tax sale development land". This landowner sent us proof that the developer demanded them to pay him over $2000. to allow them to access their property through the abandoned county right of ways and the logging roads.

I reported the developer to the attorney general. The attorney general reported him to the dept of licensing and industries. He was fined $1000. by the dept of licensing and industries. They said that they were going to report him to the department of revenue.

The association operates completely outside the laws of the state of WA. I have been shunned by the association members for asking how the association was licensed and why it was not registered with the attorney general. The association has refused to answer my questions.

The developer has actually come up to me and confronted me on the roadway to my land and cabin and told me to leave, get out, sell and just move if I don't like it there. I did not even speak or motion once to the developer during his confrontation of me. All of my personal conversation with the developer and the association has been professional and polite on my part.

The "developer" made no legal provisions for the association. He asked the secretary/treasurer at the first meeting to start the association for him. She got a business license and a bank account for the association under her and the association presidents name. The developer and board officers have no idea of how an association is operated and have no knowledge of the state laws that regulate them.

Allegedly they feel that a "landowners association" is not the same as a "homeowners" association and therefore the state laws do not pertain to them.

I do not believe that it is even legal to place an association under these circumstances where the roads are abandoned county right of ways not owned by the association and the association lots were simply a portion of lots in an already plotted pre-owned community purchased through tax sales.

I am currently considering taking legal action in superior court against the "develper" for real estate fraud. I would appreciate a referral for a real estate lawyer with HOA experience in Jefferson County, WA.

I am curious if anyone else has had or knows of any other cases of fraudulent associations which are operating illegally?

Also if anyone has any advice that may be of help in this matter I would greatly appreciate it.

I agree with Paul, you need a good real estate attorney to give you options.

JF,

It sounds like there are several others in the same boat. Reach out to them and see if any of them will join you in sharing legal expenses. It sounds like your only real option is to sue this developer. Even if you could prove only half of what you have written here, it sounds like you have many claims against the seller.

Thank you everyone for your replies. I agree with all of you. I am hoping that someone can give me a referral for a good R.E. attorney located in Jefferson County, WA.

I am also going to contact the attorney general again to see if they might reconsider undertaking this case as it involves quite a few buyers. Unfortunately we are the only buyers who seem to comprehend what is happening here.

The other "association members" shun me for questioning what is going on here. I was actually forwarded an email from an association member who recently sold her property. (She actually had the "developer" who is not a R.E. agent sell it for her)It was an email that she had sent to the "developer". In her email she told the developer that he could not tell her that it was inappropriate for her to talk to me and that she could talk to anyone she wanted. So it appears that the "developer" has had me black balled from the community.

We would like to sell our property, but do not feel that we should do so until we clear up the legal mess with the fraudulent association and access issues.

The "developer" made absolutely no provisions for an association. He simply sold the land and told everyone that there was an association. He had the buyers sign ccr's but made absolutely no legal provisions to attach the ccr's to the properties. (We do not believe that it is even possible to place ccr's and an association over the properties in this circumstance.)In addition the "developer" had no idea how to maintain the roads or what it would cost. No funding plans or permits for any roads built. There is not enough money from the association dues to maintain a fraction of the roadways. The association does not abide by any of the laws of the state of Wa. I have written proof of all of my claims. The developer did not hold a contractors registration or business license until after I reported him to the attorney general.

One point, I did search for the developer and his business with the BBB and elsewhere before we purchased our property and found no negative information. I did not consider that a developer selling property in a development would not even hold a business license. This is why I did not find any negative remarks on his business. It did not even exist.

Once again, thank you for your replies. If anyone knows of a good R.E. attorney in Jefferson County, Wa I would appreciate the referral.

I'll continue to watch this post for any further comments.

Is there any recourse for dealing with an association that was not established according to law?

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