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Complaint against HOA re: Lender's Questionnaire

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Ostuni

Guest
What is the name of your state? South Carolina

A party that recently bought a property in our community is suing us (the HOA) in Magistrate's Court. The party claims that the HOA took an excessively long time (28 days) to complete and return a project approval questionnaire to their mortgage lender, thus costing them ~$400 in interest and fees and $2k in 'personal problems'...

The HOA took a long time to complete and return the questionnaire for various reason. The HOA was not aware the property in question had been foreclosed (due to an inactive member having been served, who in turn did not inform the Board). The foreclosed property was $700 in arrears on association fees, and the HOA took time to determine if those fees could be recovered after a foreclosure. Before complying, we tried to determine our responsibilities, obligations, and liabilities before we signed the lender's form. The Treasurer was on vacation. The questionnaire required extensive documentation, etc...

Anyway, we eventually got it done, and the party successfully closed. Now they are flipping the property and suing us...

Have searched the South Carolina statutes online and can not find any law or regulation that requires an HOA to complete a mortgage lender's questionnaire at all, much less in a certain period of time. (But did find info about Florida laws which say an HOA is NOT required to do so...)

We intend to answer the complaint ourselves. Would like to know how - short of hiring a lawyer - we could determine if in fact there is a state or local law or regulation on this issue. Again, I have searched the SC statute database, but could have missed it...

Is there any merit to the complaint? We were in no way a party to their transaction with the mortgage company. We only became involved when the morgtgage lender sent us the form for our information and signature.

Granted, we took 28 days, but we did not intentionally drag our feet, and don't see how we can be liable for any losses they may have suffered.

Thanks in advance for any thought, recommendations.
 


HomeGuru

Senior Member
Ostuni said:
What is the name of your state? South Carolina

A party that recently bought a property in our community is suing us (the HOA) in Magistrate's Court. The party claims that the HOA took an excessively long time (28 days) to complete and return a project approval questionnaire to their mortgage lender, thus costing them ~$400 in interest and fees and $2k in 'personal problems'...

The HOA took a long time to complete and return the questionnaire for various reason. The HOA was not aware the property in question had been foreclosed (due to an inactive member having been served, who in turn did not inform the Board). The foreclosed property was $700 in arrears on association fees, and the HOA took time to determine if those fees could be recovered after a foreclosure. Before complying, we tried to determine our responsibilities, obligations, and liabilities before we signed the lender's form. The Treasurer was on vacation. The questionnaire required extensive documentation, etc...

Anyway, we eventually got it done, and the party successfully closed. Now they are flipping the property and suing us...

Have searched the South Carolina statutes online and can not find any law or regulation that requires an HOA to complete a mortgage lender's questionnaire at all, much less in a certain period of time. (But did find info about Florida laws which say an HOA is NOT required to do so...)

We intend to answer the complaint ourselves. Would like to know how - short of hiring a lawyer - we could determine if in fact there is a state or local law or regulation on this issue. Again, I have searched the SC statute database, but could have missed it...

Is there any merit to the complaint? We were in no way a party to their transaction with the mortgage company. We only became involved when the morgtgage lender sent us the form for our information and signature.

Granted, we took 28 days, but we did not intentionally drag our feet, and don't see how we can be liable for any losses they may have suffered.

Thanks in advance for any thought, recommendations.
**A: what was the time period stated in the contract by which you needed to provide the Buyer with the HOA signed form?
 
O

Ostuni

Guest
HomeGuru said:
**A: what was the time period stated in the contract by which you needed to provide the Buyer with the HOA signed form?
thanks for your reply.

no contract. we (the hoa) received the form in the mail with an sase. until we got their form in the mail, we were not aware of or party to the business between the buyer and the lender....

cheers
 

HomeGuru

Senior Member
Ostuni said:
thanks for your reply.

no contract. we (the hoa) received the form in the mail with an sase. until we got their form in the mail, we were not aware of or party to the business between the buyer and the lender....

cheers

**A: OK, I thought you were the Seller of the property. To clarify, you are posting on behalf of the HOA correct? If that is the case, the HOA needs to hire an atturney. The case will be dismissed.
 
O

Ostuni

Guest
HomeGuru said:
**To clarify, you are posting on behalf of the HOA correct?
correct.

HomeGuru said:
**The case will be dismissed.
thanks for telling us what we wanted to hear. why or how are you sure of that?

thanks again for your time.
 

HomeGuru

Senior Member
Ciarraine said:
He's not sure.

**A: I am sure of one thing.
*********

The regulations for SC Horizontal Property/Unit Owner's Disclosure packets are not online. It's normal that you need to provide an owner with these in a timely manner for a reasonable fee. All I could find online is the establishment act, same as you, which makes no mention of these. 28 days is a long time to hold on to a form and not provide some sort of answer, and I wouldn't be surprised if it violates a regulation if not a law. It would in DC, where I'm from.


**A: so you are saying that DC and SC have the same laws?
*********
Your association should have an attorney on retainer who can clear this up for you.

Alternatively, you guys really did inconvenience this person, and whether or not that's your fault or you have good reasons for doing it, it's not the level of service you want to shoot for, right? See if you can't settle. Maybe return the original fee for the HOA disclosures. Otherwise someone's going to be going to court and telling a judge about it and time is money too.
**A: please post any shred of evidence that confirms that the writer's HOA is a contractual party to the agreement between the Buyer and the Seller. If you read the original post very carefully, you would see that the Buyer knew of the negative HOA information ( albeit late) and still CLOSED on the property.
 

HomeGuru

Senior Member
Ciarraine said:
I did not say that DC and SC have the same laws. I said that that in my home jurisdiction (and for that matter though I didn't say it, the neighbouring states), it would be a violation of the Horizontal or Community Property regulations to be that dilatory. I implied that that might be the case in SC as well, and informed the writer that the definitive answer wasn't available online.

The condominium does not need to be a contractual party to the sale to be in violation of state regulations governing the conduct of condominium regimes. Depending on how those regulations are written the buyer may or may not have a consumer protection issue.
**A: the condo is not a contractual party.
 

HomeGuru

Senior Member
Ciarraine said:
Nor does it need to be to have fiduciary responsibility to a unit owner, nor does it need to be to have consumer protection and fair housing issues with a prospective unit owner.

The point is, it's probably cheaper to pay this guy something to make him go away than to deal with the lawsuit when they know they were cunctatious in dealing with a routine request.

It's a word. Look it up. :)
**A: idiot, it's a word. Look it up.
 

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