Repair violations home now has sales contract, can buyer be forced to fix?

Started by DanaA • 9 replies • 2195 views

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DanaA (Florida)
Posts: 117

Posted:

Please help! We are a Florida HOA, 55+ mobile home community, and several homeowners have been given multiple letters to repair hurricane damaged homes, almost two years now. No lawsuits to date(aka talk, not walk). Now, one of those damaged home owners has a contract to sell property, saying they can't afford to repair it. We (board) said then that the BUYER of property has to acknowledge violation and agree to replace the carport, and most important - to acknowledge such repair and replacement in the sales contract so we know it will be done. Seller and sales agent say we are being ridiculous,and seller will sue HOA if sale does not go through.
Sales contract says property being sold "as is".
My burning quetion - A torn off carport is clearly in violation of CCRs. Do we have recourse? If we approve this sales contract as given to us by agent, is that forgiving the repair?

RogerB (Colorado)
Posts: 5,067

Posted:

Dana, I don't know about Florida statutes but in Colorado we would provide a status of assessment letter to the title company. In that letter we would state the owner is not in good standing. That there are the following violations for which the owner has been cited and corrections have not yet been made.
List of each with the current related costs ....

MelissaP1 (Alabama)
Posts: 13,836

Posted:

Why is the Real Estate agent giving the HOA a copy of the Seller/Buyer's Agreement on the sale of this property? That seems a bit out of line to me. Are they worried about having a lien placed on the property for the repairs so they are trying to avoid that? The HOA could potentially levy a lien against the owner for the cost of repairs. Only if the HOA agrees to do the repairs themselves and the owner doesn't pay the bill.

The contract is sell "As-is" which means the buyer has to accept the damages as-is. Which means they have to accept the fact the house is in violation of the rules of the HOA. The situation really isn't any of the HOA's business when it comes to the sales contract. I don't think the seller would have much of a case to sue the association for failure to sell their house. The owner is responsible for fixing or making accommodations (like reducing the price of the property if the buyer agrees to accept the damages "As-is"). I have a feeling that the owner is trying to "weasle" out of fixing the issue by blaming the HOA.

I would have the HOA stay out of the situation and just let the Real Estate agent know that the house is in violation. How that gets resolved let the HOA know. The HOA doesn't own the property just manages the appearance of it. I would do my best to throw the issue back to the seller/buyer's table where this mess belongs. The HOA's two cents is get the violation fixed!

Former HOA President

NancyD1 (Florida)
Posts: 447

Posted:

Mobile home parks in Fl. are governed by FL Statues 718, 719, or 723 if you have a land lease. Some of the statues defer to FL 720(HOA) for remediation. Is the land owned by the mobile park or the unit owner? Very important. Fl has bundled these statues for mobile home parks. They are regulated by the DBPR and seriously enforceable.

The BOD has to tread lightly on this since there was no enforcement of the violation. You cannot dictate to the buyer that he has to repair the property. If the buyer backs out of this sale because of anything other than rental fees, utility payments or anything associated with the land lease the HOA may be held responsible by the buyer.

You will have to define what statue constitues your mobile park. You should find this in your CC&R's. If not call the Dept. of Business and ask for their guidance.

PaulM (Pennsylvania)
Posts: 1,347

Posted:

DanaA: Your association, and expecially the Board, is in a very delicate situation. You cannot dictate to the prospective buyer to replace the carport, and thus, for the seller to lose the sale as a result of it. You possibly could be liable for court action. Also, for the buyer to buy 'as is', means just that.

On the other hand, the seller has been 'allowed' for 2 years to go without repair and now, that's why he is selling, because he does not or cannot pay for the repair. You are between a rock and a hard place. You also have the 'other violators' to deal with.

Don't see how you can force either side to repair the 'violation'. Being in Florida, do your docs state anything regarding insurance against hurricanes or such? Under what dictate is the Board being asked to sign (or not sign) a sales contract? Not familiar with that process, nor why the Board would have any say in the sale.

DanaA (Florida)
Posts: 117

Posted:

We are governed under 720, as each owner owns their land. Quiet 30 year old community of under 200 homes, and former/some remaining BOD members would try to correct violators by "giving them a call", because most people know each other. New BOD members now trying to instigate and implement correct procedures. Community had one property management company for 25 years who was hands off. The BOD hired a new Property Manager this March, telling him "we do most things ourselves".. Shouldn't Property Manager handle entire sales approval process? ... Presently, sales/transfers must be approved by BOD, and BOD gets membership application from buyer,together with a copy of the sales contract,and conducts interview and has authority to do background checks.... Regarding this violation, the BOD notified the real estate agent that this particular home is in violation, and must be fixed by buyer, but BOD wants acknowledgement in writing that new buyer will fix - possible to enforce? CCRs state that all homes must have carport (only 1/3 of it remains). The BOD hasn't let violations slide entirely (right?) since property manager sent out violation letters sporadically for two years. No legal action was taken because BOD was being "nice" and were waiting for owners to get insurance money, etc. I can't find any reference in our CCRs regarding propeprty insurance issues or requirements for homeowners, we are going to revise CCRs in the next year. 1) What can we do about this sale? and 2) What should CCRs say that would prevent this issue (mess) in future? Thanks so much.

StephanieS4 (Florida)
Posts: 1

Posted:

land is owned by unit owner.

NancyD1 (Florida)
Posts: 447

Posted:

Dana, it's great that your HOA falls under 720. You now have some protection, possibly. Your HOA has to take one step first. Send a fine notice. If this is not sent and a predictable fine imposed, you will have no standing. This fine must detail what the HOA wants repaired and that the unit will be repaired at the owners expense if not done in the alloted time. This will carry to the new owner. The HOA cannot lien for a fine or violation.

If your CC&R's or By-laws are going to be revised in the future you should restate them with simular language of FL 720.305. This is where your HOA is protected. The HOA will have to prepare an Estoppel (statement of account) for the seller. A closing on real property cannot procede in FL (only foreclosure)unless the closing attorney or title company has this and the governing doc's. When this form is filled out be sure that the violation letters are included and the fine. 720 gives the HOA a position that now the new homeowner or the old homeowner are responsible. It no longer become an issue for the HOA. One of them is responsible. Let them fight it out. If the homeowner is smart he will settle this before the closing. If it is sprung on the purchaser, he has the option to opt out of the sale.

The real estate person must be under the impression, as I was, that your park is governed by the Mobile Home Act. If it were you had no chance of collection. You should inform her that you are a true HOA and as such you abide by FL 720, and specifically FL 720.3085.

Property and Hurricane insurance is not mandatory by the state. The only one who can enforce insurance on a real property is a mortgage holder. This will protect his interest.

Problems like this are common with some HOA's. The BOD has to learn to put personal feelings aside and run it as a business.

DanaA (Florida)
Posts: 117

Posted:

Thanks Nancy. If I may clarify what I think you said - even though we now have a sales contract between "violator" seller and new buyer, which is scheduled to close in three weeks, we, the BOD should immediately send a fine notice of what we want repaired and the estimated costs of those repairs, which would be an expense to the seller if the HOA goes in and makes those repairs (cost plus 10%, I think our docs say)? Send to the buyer, too? To the real estate agent? Proper disclosure? Shouldn't this letter come from our attorney? Our BOD in past has never exercised this option because they didn't want to have to spend any money for repairs to owner's property and never get money recovered for the association. Getting back to my confusion: So let's say somehow the BOD to agrees (majority vote?) to send this letter immediately, and the closing takes place in three weeks with nothing done, then the seller's problem is now legally transferred to the buyer as buyer's problem? Seems like there is little time frame to get this done legally. I can't imagine that the BOD would actually be able to go in and get carport repaired and paid for by HOA in three weeks without a major war on our hands from all concerned. But once property changes hands, if we enforce that letter and do repair if buyer won't pay for them, the new buyer could sit with a lien on their new property for those repairs and we would not get the HOA's costs back for maybe decades,as long as new owner owns the property, right? So much to learn, and so little time............thanks!

NancyD1 (Florida)
Posts: 447

Posted:

The sale is in 3 weeks? If a purchase agreement has already been signed, you will have to give the closing attorney or the real estate sales person the Estoppel and attach the violation. The violation will carry with the exchange. The new owner will now know that the property carries a violation and will probably want to settle with the current owner on it. It is to late for the fine. You have to give the seller 30 days to repair before any fines can take place.

Why would the BOD have to have a majority vote for a letter of fine? First, the BOD does not fine a HO in FL. It is done by a Grievance committee or a non board member committe. This follows FL 720. The HOA cannot lien for fines. You can lien if the HOA paid for and repaired a finable action.

Since you obviously have a computer go to the Fl statute 720. Print this and study it. Give it to each of your board members. It is the rule of the land here. When your doc's are revised they should follow these laws. You need an attorney for the changes.

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