how can the individuals be sued for HOA Covenants?

Lynne I find you post confusing. Who was selling property? Is it that the new owner bought a piece of property not knowing there was an association/covenants?

Lynne,

As I understand you posting, an owner listed their property as not being in a deed restricted community ran by a Homeowners Association.

This owner lost the sale when it was disclosed that an HOA existed.

Due to this loss, they have chosen to bring legal action against the Association and each member of the Association (or is it each member of the Board) to recoup the loss.

If your Association is incorporated, then the individual should have only brought action against the Association.
If your Association is not incorporated, then the proper thing would be to bring action against all members (as their is no corporate shield).

Since the existence of an HOA and deed restrictions would have been found out in a title search, I don't see how the individual will win.
That said, it will likely cost some money to defend. Everyone should file a counter suit for reasonable attorney fees.

I'm surprised the individual found an attorney who would represent them for such a case.

Sounds weird. Usually the burden is on the seller to provide a community's CC&Rs to the buyer and disclose the fact that the property is in an HOA. So basically they're trying to sue the HOA for their own negligence. Given the hot real estate market in many parts of the country, there are probably potential buyers lined up and waiting for a sale to fall through.

Either the seller and the attorney are not among the world's great thinkers, or there is something else about this case that makes it less straightforward.

Anyway, as we often say around here, anyone can sue anyone else for any reason - but that doesn't mean they'll win.

Yes they claim they didn't know, even though they were presented with the documents before the sale. Plus it is on record.

As in the Declaration is recorded with the county. Normally, that is game, set and match.

I suspect there is a lot more to this. Attorneys know they must not bring frivolous suits.

You nailed it How can the buyer blame the HOA because of the seller's omission. I am feeling a little more confident with the outcome of the lawsuit now. Again thanks for everyone's input. It has been helpful and I appreciate it.

This is something I had mentioned in the past as a potential lawsuit. Here is the deal... In some states it is required the seller provides the HOA documents to the buyer. They are to give them the CC&R's, by-laws, and Articles of Incorporation. Again this is SELLER responsibility. However, in many states it is considered the BUYER'S responsibility to be "informed" as the documents CC&R's and Articles of Incorporation are PUBLIC documents. The CC&R's being at local court house records department. The Articles of Incorporation at the State level. By-laws are a bit different. They are technically owned by the HOA itself. Not required to be published PUBLICLY but are often with the CC&R's. Almost like they are the same document in many HOA's. (It's confusing).

Have said that, this can cause people to think they can sue the HOA, seller, lawyers, title company, their realtor, or basically anyone whom sold them their home. It is because of this, that is why the documents are PUBLIC. None of these people wanted to be responsible for providing basically. A few states got in on the act to make it extend to Seller responsibility.

The lawsuit will most likely lose in court. At least for the HOA's portion as they are NOT responsible for providing public documents. If the seller was responsible in your state, then that is the party they must sue. The judge will most likely dismiss the case against the HOA but not the seller. The HOA may still have to hire legal assistance (No retainer necessarily) to defend/respond. The HOA can always countersue for something as well if needed. Otherwise it can ask the court to have the suing party pay for their legal bills for being dragged into court.

Now the other situation it can be is if someone is trying to sell a house. They lose the sell or expected profit due directly because it's in a HOA. The person may sue for the difference of perceived home value loss. Which they would have a difficult case. There would have to be someone who would go to court to claim they would not pay X amount for the house because it was in a HOA. Example: Houses are selling at $100K. The person selling sells theirs at $90K. A 10K loss. They have to prove in court that the 10K loss was a direct result of HOA existence. Today's economy this would be extremely hard to prove. House sale prices are on not on the rise in general. Basically the sell could be because of the "bubble" bursting in real estate. I would say they would have a nearly impossible case. Plus they would no longer be a HOA member to have the right to sue the HOA once they sold...

You would NOT need a real estate attorney. The HOA is a corporation. The HOA would need someone familiar with contractual laws or business. Good luck.