CC&R Enforcement across ownership change

Mr. A owned in home in our community and violated Architectural restrictions. This existed for several years and he never received a notice from the HOA. The home was sold to Mr. B who lived there for over a year. Mr. B was served a notice of the violation and asked to correct the problem. Mr. B claimed the notice was not enforceable since the situation existed for for several years, no notice had been given to the previous owner, he had not been enformed prior to closing, and over a year had elapsed before he was noticed. The community is in Arizona. Does Mr. B have a valid reason for ignoring the violation notice? Can the HOA force Mr. B to make the changes? Does anyone have a reference into Arizona (or some other state) case law?

Most likely if the original violation was NOT taken care of in the first 30 days to up to a year,(depending on CC&R's) then nothing can be done. Homeowner B is NOT responsible for homeowner A's mistake. Unfornately the HOA does NOT get a second shot in fixing these issues when a new owner takes over. They may inform the new owner that something isn't right and it's NOT been approved but can NOT force them to correct it. In other words, the new owner can keep the violation but not "improve" upon it. They can remove it at their cost if they choose so just to make peace.
We had a home that someone painted "Torquise". Our color scheme is muted pastel colors NOT the bold torquise blue the home had on it. The paint itself was done well but the color is very outstanding. Unfornately, the ACC committee years ago did send notice and confronted the owner about their illegal choice. However, the owner cussed the ONLY ACC member out, and the ACC member quit immediately. Leaving no one in charge of the ACC for a few years. The house eventually sold. The new owner didn't change the color since the paint is still good. I told the new owner that the paint color on their home doesn't match the approved color. I can't force them to change it, but if they need to paint, they will have to get another color approved. Paint colors have to be approved prior to painting each time anyways. So far, the owner's have just "touched up" and the paint still looks good. It just sticks out like sore thumb.

CC&R's do not become enforceable if they aren't enforced.

This association, according to the original poster, had never sent the seller a notice of violation, therefore, they may not be able to force the buyer to make the change. But then again, they may. It may depend on whether the HOA knew of the violation. If they violation was not noticed until the house was sold, then it is possible that the HOA can go after the buyer, and then the buyer could sue the seller for not disclosing that he had violated an HOA restriction.

The thing to do is to consult with an HOA attorney.

It only costs a filing fee to go to small claims court, and there can be no attorneys (in Arizona). So there is no a huge legal bill. Neither the loser or the winner can appeal the court's decision.

If the HOA chose to go to small claims court, it would be well advised to really know the law, have proper documents, and spend a lot of time preparing to present a cohesive case to the judge in 5 minutes.

If the court awards a judgement, then the buyer would have to make the changes, or the association can go back to the court and the judge would force the buyer to comply, or would hold him in contempt of court, which if continues, can amount to jail sentence.

A lein is not a judgement. A judgement is the decision handed down by a judge. A lein is an encumbrance on the title of a property and a buyer would not close escrow, and a lender would not lend money on a property with an outstanding lein. So the lein just prevents the property from being sold until the lein is cleared.

Because in AZ a fine cannot become a lein on a property, here is what can happen if a homeowner continues to violate a covenant, and the association is reluctant to go to court.

The association can continue to fine the homeowner and let the bills pile up. They can send the homeowner a letter informing them that they are considering the option of going to court to get a decision.

The violation and fines becomes a permanent part of the record for that property. When the buyer attempts to sell the home, AZ law requires the seller, if the HOA has fewer than 50 homes, to deliver the HOA governing documents along with a disclosure of any violations the HOA has against the home. If the HOA has greater than 50 homes, they must notify the HOA as soon as they sign the sale contract and the HOA within 10 days must deliver this information to the buyer.

If there is a violation and/or fines against the home, the seller must disclose this. If the real estate agent becomes aware of any violations, and according to Real Estate law here, they need to ask questions, then the RE agent must inform the seller in writing that they must disclose.

So when the house goes up for sale, all the HOA has to do is send a letter to the listing broker informing him/her that there is a deed restriction violation against the home. The listing broker then required by AZ law to inform the seller in writing that this violation must be disclosed. And all of this must take place within a 10 day period, so that will happen long before it's time to close escrow.

The buyer will not close escrow, and the lender will not lend until the violation is cleared. The seller is stuck now and must clear the violation or lose the sale.

If this slipped by the HOA and they didn't know the house was being sold, or the management company forgot to place the notice of violation in the documents, and the house closed, the HOA can force the buyer to comply, and the buyer could sue the seller for not disclosing. The buyer may have a case against the listing and selling real estate brokers also.

The key here is for the HOA to keep writing letters trying to collect from the violating homeowner and be prepared to send that notice of violation to the listing broker when the house is up for sale.

How long can the HOA delay withot going to court? Courts abhor inaction. However, an HOA is not required to take the small claims route where there is no legal expense. And they may deem it not financially prudent to spend the HOA funds in legal fees when they cannot know if they will win. So they could have a very good reason for not suing, and making the election to sit tight until the homeowner decides to sell.

The information I'm sharing here is current. I've been in a real estate sales class recently and this very example was discussed during a class on the disclosure requirements for sellers and real estate agents.

However, I still recommend that this be discussed with an HOA attorney to see what they say about it.

BruceH2,

I can certainly agree with you on that statement.
This is my first year as a board member and for several years I have lived in this community and had noticed violations on a daily basis.

I felt that nothing was being done or (now found out) these violators were ignoring the violation notices mailed by our PM, not doing anything to comply! I felt as if the board, PM were just making “scare tatics”

Too make a LOOOOOOOOONG story short. The current board of which, I’m the vice President, has and will continue to enforce all governing documents and we are not being liked at all.

I hear this from most of the homeowners that are found in violation. “I’ve been doing that for years, now you are going to tell me I’m in violation of our governing documents?” Or “why am I being fined and so and so isn’t?” I'm sure you have heard a lot of these yourself? How about this one?

I couldn’t believe my ears, when he said, in court, that he didn’t know that he and his wife had resided in an HOA, nor did he know that there were yearly HOA assessments.” It was rather humorous, as I’m sure you can certainly imagine! LOL. Yet he admitted to the judge and too all that were present, that he and his wife lived in the community since 2001 (which he paid his assessments, not on time, but he did pay them acknowledging that they were living in a mandatory HOA.

The lien had expired several years ago, from which it had been filed, so the board paid another $75.00 and placed a second lien on his property to assure that we would at least collect “if” he had sold within the next four years. THIS HAD GONE ON LONG ENOUGH! We were expecting to collect a relatively large sum of money(several years of unpaid assessments,2002,2003,2004,2005,2006,2007, late fees, interest, court cost, costs for filing the liens, etc) to the tune of roughly 3 or 4 grand. We paid ($150.00) fee to file suit, a few months ago. We of course won, but chances are we will never collect unless he sells!

Never the less, we certainly are making a name for ourselves, we would prefer it to be more positive (if you know what I mean) but it wouldn’t be so difficult if the previous boards would have enforced the governing documents, in the past years.

Chuck W.

This isn't a matter of disclosing. Since the previous owner was NEVER given notice they were in violation. No proof that the previous owner was ever given a notice means there is NOTHING to disclose to the new owner. You can NOT make the new owner responsible for the old owners mistakes. That is why it is VERY true that if you don't enforce a CC&R's in the timely manner the CC&R's dictate, you can NOT go back!
This is also true if the previous owner owed money or were behind in dues. The HOA can NOT force the new owner to pay what the previous owner owed. If the HOA did not put a lien on the property prior to the sale, then they are out the money. I've heard of HOA's trying this tactic before and they get in big trouble for it. Which means ALL the owners get in trouble.
A HOA is NOT a separate "entity". It is YOU and your neighbors. So please stop treating it like a "They" situation. YOU have a say in what is going on as well. YOUR vote put the board into office. If YOU did NOT vote, then you are responsible for NOT participating and getting what you get. A non-participator in their HOA is just as bad as a bad decision made by their HOA board.
Sorry went off in a tangent there... Just get soo frustrated when people forget that the HOA is run by HOMEOWNER's and NOT judges, lawyer, real estate agents, or a relative of a owner....

OK, so Mr. A bought his home and like a good homeowner should have read all the deed restrictions and covenants and go with the property. To that extent it sounds like he never asked permission for the changes made and made changes against the property that were against those restrictions and as a good homeowner should know this. To say just because he didn't receive a notice means he didn't know he was in violation is a lame excuse. Depending on what you do most of us know what we can and can't do, we put it in our newsletter every time, you must ask permission, sooner or later they will see it.

To the point at hand, in theory they could go after Mr. B for the violations, and I think Mr. B could go after Mr. A for not disclosing to him that he did not ask for and have permission to do this. Remember...ignorance of the law is absolutely no excuse. Mr. A should have read his contract and not violated, and since he did violate it that should have been disclosed at selling. I don't want anyone to tell me he didn't know, unless they know Mr. A personally no one can say that.

However, I think the right thing would be to grant a variance or grandfather this change in, unless their attorney has a different opinion I would be surprised if it would stand much of a chance in court. But, not knowing what the change was, the dates and how it all went down all we can do is speculate.

We talk a lot on here about boards not enforcing stuff consistently. In my opinion when you buy the home it is your responsibility as a homeowner to read your contract and live up to it. Don't break it, claim ignorance and cry when you have incurred costs. And I disagree with you Melissa, an HOA is run by a Board of Directors that is voted on by the homeowners, the homeowners don't run it. Just like shareholders don't run a company, and residents of a city don't run a city and U.S. citizens don't run the US. We all vote on our representatives and it is their ideas and thoughts that often get pursued.