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KarenN5 (Texas)
Posts: 4
Posted:
A former homeowner extended their patio onto common property 24 yrs ago. She then enclosed the patio with a room. The sitting ACC approved the enclosure but we don’t have all the paperwork to prove that. Now the most recent homeowner is trying to sell the property but the mortgage company of the potential buyer wants our Board President to sign a document stating they quitclaim the property to the HOA. The board President refuses to sign. This current owners mortgage company waived that requirement but the new potential Mortgage of the potential buyer will not.

QUESTION: What is the ramifications to the Board President if she signs it. This standoff is causing financial hardship on the current owner. They just sent a Demand letter giving us 5 days to sign or they will hire an attorney.

Our board think we need to immediately turn this over to an attorney.
TimB4 (Tennessee)
Posts: 21,061
Posted:
Your running into an adverse possession issue and the Associations timeline to challenge it may have passed.

You need to talk to an attorney versed in adverse possession.
TimB4 (Tennessee)
Posts: 21,061
Posted:
The board could sell the property to the individual (vs. signing a quit claim deed).
Buyer to pay all costs (survey, transfer fees, title, etc.).

Again, check with an attorney.
JohnT38 (South Carolina)
Posts: 1,631
Posted:
Quote:
Posted By TimB4 on 08/31/2022 3:44 AM
The board could sell the property to the individual (vs. signing a quit claim deed).
Buyer to pay all costs (survey, transfer fees, title, etc.).

Again, check with an attorney.

Our declaration spelled out the % of ownership and any changes would have required an amendment by the owners. It also makes me queasy giving the Board the authority to sell off any common property. If it was me I would be enlisting legal aid and would not cave into the demand letter.
KarenN5 (Texas)
Posts: 4
Posted:
Thanks to all. We have forwarded the demand letter and their Boundary line Agreement to an attorney.

We would have to get 2/3 vote from the community before having permission to sell the property to them.
AugustinD
Posts: 1,027
Posted:
Quote:
Posted By KarenN5 on 08/31/2022 1:49 AM
A former homeowner extended their patio onto common property 24 yrs ago. She then enclosed the patio with a room. The sitting ACC approved the enclosure but we don’t have all the paperwork to prove that.
-- I think any paperwork indicating approval by the ACC is going to muddy the legal waters greatly. The more paperwork indicating the HOA had notice of the encroachment years ago, the more it could be said that the lot owner relied on promises the HOA made that it was fine to enclose the patio, implying the encroachment was fine, and so on. Un-doing the enclosure of the patio is expensive. "Reliance on a promise" + high cost of undoing the reliance = somewhat more likelihood a court would find in favor of the lot owner?

-- Who has liability for an incident on the encroached property is a big concern and must be identified. From experience, competent HOA/COA attorneys read HOAs/COAs the riot act in situations like this.

-- TimB4's Texas adverse possession link is great. I read a bit more of the statute sections mentioned. Also from experience, I think Texas case law has a lot to say here. Hence I am glad the OP stated this has been sent to the HOA attorney.

-- The fact that the HOA has paid taxes on this encroached land, and presumably plats show the common area was encroached, counts for something. Perhaps mostly it counts for protracting litigation such that, as the line goes, the only winners are the two sides' attorneys.

-- I think front and center in the minds of all concerned here is the likelihood that resolving this dispute is going to cost a lot of money in attorney fees. If the HOA attorney does not bring the costs of litigation up (and competent HOA attorneys will, IMO), then the board should do so. In particular the Board should ask the HOA attorney to lay out all options and an estimate of each option's cost, including a quick settlement of some kind, to include potentially an owner's vote on selling/quitclaiming the common area.

-- Under these circumstances, with the sale of a home pending (and the failure of the sale on account of the dispute herein possibly being the cause), would the board have the authority to override owners and sell or quitclaim the land? I tend to think not.

-- If the HOA resolves this for less than a cost of $20,000 (= attorney fees plus the cost of re-platting), then I'd say the HOA Board is doing a very good job.

-- KarenN5, how many owners are in this HOA? How much revenue does the HOA receive annually from owners?
DouglasK1 (Florida)
Posts: 2,046
Posted:
Quote:
Posted By KarenN5 on 08/31/2022 7:24 AM
Thanks to all. We have forwarded the demand letter and their Boundary line Agreement to an attorney.

We would have to get 2/3 vote from the community before having permission to sell the property to them.

I assume the same 2/3 vote would be required to give away property too, what do you docs say?

Escaped former treasurer and director of a self managed association.
JohnC46 (South Carolina)
Posts: 14,265
Posted:
Quote:
Posted By TimB4 on 08/31/2022 1:57 AM
Your running into an adverse possession issue and the Associations timeline to challenge it may have passed.

You need to talk to an attorney versed in adverse possession.

I agree with the possibility of adverse possession and talking to a lawyer. I think the HOA may well be found responsible and have to correct as the lawyer advises.
KellyM3 (North Carolina)
Posts: 2,239
Posted:
I'd do whatever was cheapest to pair the underlying ground ownership to the patio owner. After 24 years, the community isn't materially harmed and there's sentiment the project was approved.

Messy HOA work back then.
DouglasK1 (Florida)
Posts: 2,046
Posted:
Assuming transfer of the property requires 2/3 vote of the membership, perhaps the bank would accept something less, such as a permanent easement or 99 year lease for a nominal amount.

Escaped former treasurer and director of a self managed association.
KarenN5 (Texas)
Posts: 4
Posted:
Goodness I certainly hope this issue. doesn’t cost that much. We have about 125 homes at $1100 each per year.
KarenN5 (Texas)
Posts: 4
Posted:
Messy work yes. And here we are. The ACC didn’t do their job and failed to oversee the project. A certain amount of sympathy was involved at the time. The widows husband had been killed in a helicopter accident. He was a police officer.

AugustinD
Posts: 1,027
Posted:
Quote:
Posted By KarenN5 on 08/31/2022 4:15 PM
We have about 125 homes at $1100 each per year.
The relatively low annual income of this HOA vs. say the cost of litigation argues for pursuing transfer of title to the owner to this land and amending the plats; having a vote of owners beforehand (explaining all); being brutally honest with owners; pointing out to owners that it's not just directors that have to be on the lookout for encroachments like this; indeed all owners had the chance to challenge the encroachment over the years and, as a matter of law, acquiesced or looked the other way here.

With the HOA attorney speaking with the owner's attorney, ask the owner of this lot to split the costs. If these attorneys are the least bit competent (and understand their job in fact is to keep people out of court to the extent that this is possible), they'll work out a deal that is fair. Said deal must also pass muster with the buyer's lender.

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