Arrears HOA Dues, Attorney, Administrative, and Late Feese

Started by BarbraF1 • 5 replies • 1156 views

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BarbraF1 (Indiana)
Posts: 1

Posted:

I purchased a short-sale home in 2005 and rented it to the previous owner. At closing the title company could not find a HOA registered in the State o Indiana by name given. Two years later (2007)while on active duty, I receive court papers for HOA fees. I asked for a continuance which was granted based on the Soldiers and Sailors Act. I learned that the HOA was established in 1996 and administratively dissolved by the state in 2001. The HOA applied for reinstatement in Sep, 2009 and was approved.I was discharged from AD on July 31, 2015. I have received new court paperwork for fees to the tune of almost $4000.00. I checked my deed and no HOA or covenants are mentioned. I didn't sign any paperwork at closing stating I was purchasing property in a HOA. I am willing to pay dues from the period the HOA was reinstated without the excessive late fees with equal 43% per year plus administrative with the $250.00 dues per year. I have never lived in the property and currently the property is vacant. Please advise I thin I need an attorney.

JohnC46 (South Carolina)
Posts: 14,265

Posted:

Barb

Make an offer to pay past dues in full, less any penalty. If they accept, fine. If not, then consider legal help.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Thank you for your service. However, there really is not anything you sign to prove your in a HOA. The documents are considered PUBLIC and available at your local court house. Some states require turn over at the sell of the home by the seller. However, in cases of short sales, foreclosures, or straight cash type of sales this often doesn't happen.

I'd suggest contacting the HOA to ask what name the CC&R's and Articles of Incorporation are under. Plus where you may find a copy. They may provide you one at a small cost. Otherwise, should be available online or at the county courthouse records department.

Former HOA President

TimB4 (Tennessee)
Posts: 21,061

Posted:

Barbra,

Thank you for your service.

Keep in mind that there are incorporated and unincorporated Associations.
Even if your Association lost it's corporation status, that doesn't mean that the Assocaition went away. It simply means it became unincorporated (i.e. HOA, Inc. Became HOA)

You owe the assessments.
If it goes to court, you will likely have to pay the assessments, late charges and attorney fees.

If you settle, you may have the charges and (perhaps) some of the attorney fees waived.

The fact that nobody told you an HOA existed won't cut it as a defense in paying the assessments.
In fact, your posting specifies that the closing company did have a name of the Association. Therefore, they knew covenants were attached to the deed and likely informed you of such. Your deed won't specify that covenants are attached. Instead, the recorded covenants refer to the deed. This is why title searches are done.

You may want to contact your title insurance and see if they can help.

KerryL1 (California)
Posts: 14,550

Posted:

Like Tim, contacting your title insurance company may be a good way to start.

LarryB13 (Arizona)
Posts: 4,099

Posted:

Barbra,

Both Tim and Melissa have made some good points.

By purchasing through a short sale some of the usual buyer-protection may have been by-passed. Still, your deed should contain some language that the property is subject to restrictions recorded in the public records, most likely by reference to the book and page where the the CC&R's were recorded.

I am not all that familiar with the Soldiers and Sailors Act, but it seems that even though the act allows you to delay civil proceedings against you it would be unfair to the other party to deprive them of any interest or other fees arising from that delay. If I am reading this correctly, you have never paid any assessments since you bought the house in 2005 but you have received rental income during that same period. The cynical side of me is wondering how you were able to purchase this home and manage the rental process while taking cover behind the Soldiers and Sailors Act to avoid dealing with the HOA issue?

My math says that 12 years at $250/year = $3,000. Another $1,000 for interest, late fees, attorney fees, and court costs are not unreasonable and bring the total up to the $4,000 you mentioned. My advice is to pay up and be done with it.

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