Seller failed to disclose a condo assessment

[Condo Dad]

What is the name of your state (only U.S. law)? OHIO

Condo Seller did not disclose an assessment on the Ohio Disclosure Form and merely entered a total amount under the paragraph about maintenance fees. What I think the Seller did was hid the assessment fee and added it to the HOA fee and just showed a total Monthly Fee XXX" with no further disclosure or explanation. My title company's Settlement Statement also showed no amount after "ASSESSMENTS" and I feel certain the Seller's Statement didn't show it either. Offer to Purchase did state Buyer must pay a maintenance fee (no amount) but under the paragraph re assessments Buyer is responsible for, it states "NONE." Seller's attorney says I agreed to the "monthly fee" and the Selelr did not have to elaborate or explain. This assessment is for 20 years and half of the "Monthly Fees".. I found this out weeks after closing! I am paying the correct HOA maintenance fee but not the assessment as I am disputing it. Have filed a claim against the title company. My agent was shocked to learn there was an assessment and Sellers agent's lawyer says I agreed/accepted the "Monthly Fee" and owe it ... basically tough. Is this tough, Dad??? Isn't this Breach of contract?

 

[festival]

If the seller failed to disclose a "special assessment", then you may have a case. I'm not a lawyer and not from Ohio. Does the HOA have a special assessment for your condo in their records (with a balance due)? Or is this just a lot of unexpected maintenance that was added to the monthly fee? Ask the management company (and/or board) for the written notifications that were given to the seller. Ask them for the balance due from the special assessment for your unit, if any. Then get a lawyer.

You are crazy not to pay the HOA all the fees for your unit, even if you dispute it. Your dispute is with the seller, not the HOA. The HOA can assess late fees, legal fees, collection fees and pursue legal action if you do not pay. Try to get it back from the seller or title company, but pay it.

The funny thing is, you might have agree to pay it if you were notified in advance. But since the seller did not notify you, you might get reimbursed for it.

How much money are we talking about?

 

[Condo Dad]

Seller failed to disclose an assessment

It was for 10 years. Title company TOTALLY failed to verify if there were any assessments and my claim against them denied as it is a "contractual issue." We are talking over $3k.

 

[festival]

Okay, I'm trying to understand this. It sounds like the previous owner got behind on the monthly maintenance fee, like 10 - 20 years behind. This "maintenance fee" is also known as the regular assessment that every condo pays, right? So then the previous owner had a higher monthly payment than the other condos in order to pay back fees. Then you bought the condo and now you are (or were) paying the back fees. Is that the gist of it? You inherited all the back fees (assessments) that were being paid by the seller? So the HOA wants you to pay the real maintenance fee for your condo, plus back fees.

If this is true, then the seller had money (assessments) due to the HOA that the seller did not disclose. It sounds like you have a real case. You need to get together with an attorney to sort it out. In some of these cases, the HOA cannot collect from you, but be careful with this (see my previous post) since you can get hurt very badly. It may help to read the sections in your governing documents (bylaws) that explain regular assessments so that you can show that you are being asked to pay back assessments, not regular maintenance fees.

I think that if a lawyer charges a set rate for a real estate purchase and then something like this happens, then the lawyer should fix it for free since it is part of the purchase (and since the lawyer did not protect you, which is the reason for hiring a lawyer).

Please let us know what happens.

 

[nextwife]

Normal closing proceedure includes the closing agent getting a condo association status letter, which shows fees paid and fees due. Usually, fees still due from the seller are collected at closing, and then either paid or credited to the buyer to pay (depending upon what the offer language states about who is responsible for what)? Have you reviewed your closing docs? Who did your closing?

 

[NC Aggie]

I'm a bit lost in reading your explanation, but if I understand you correctly you were aware of a total HOA fee & assessment that you assumed was just an HOA fee? So for personal budgetary purposes, you still would be responsible for paying the same amount you assumed you would but part of it goes towards HOA fees and part goes towards this assessment? It really sounds like semantics in the big picture and you may want to review the HOA bylaws or any documentation on this assessment. The only way I would have a problem with this is if the assessment was levied as a one time fee for current condo owners that would be spread out over the 20 years. If that's the case, I guess your argument would be that the seller is in fact the one that is responsible for this fee and cannot pass it off to you without proper notification/documentation? However, if this assessment was levied as an annual fee then I don't think you really have a strong cause to be upset because I don't believe the intent would have been to deceive you.

 

[festival]

I think it is pretty simple: the seller had unpaid assessments due to the HOA. So the seller still owes the HOA and also owes you for what you have paid to the HOA. Unpaid assessments of the previous owner are definitely not current maintenance fees.

In my state (Iowa) the HOA can collect old unpaid fees from a new owner, but you could try to recover from the previous owner the amounts paid since the previous owner also owes the HOA. The HOA is entitled to assess you with late fees, collection fees and other nasty stuff.

State law here also says you are entitled to a statement from the HOA of the unpaid assessments (before the sale), see nextwife's post. I would like to know what the HOA put in writing to the title company or to your lawyer.

Someone was incompetent or mistaken or maybe fraudulent.

 

[NC Aggie]

I think it is pretty simple: the seller had unpaid assessments due to the HOA. So the seller still owes the HOA and also owes you for what you have paid to the HOA...

I'm not certain that's the case because the O.P. stated that the assessment was for 20 years and that may mean they're being asssessed for a 20 year period, not necessarily that the seller had 20 years of upaid assessments. I doubt very seriously an owner go go 20 years without paying assessments and the HOA not place a lien on the property.

 

[HomeGuru]

I'm not certain that's the case because the O.P. stated that the assessment was for 20 years and that may mean they're being asssessed for a 20 year period, not necessarily that the seller had 20 years of upaid assessments. I doubt very seriously an owner go go 20 years without paying assessments and the HOA not place a lien on the property.

**A: It appears that the assessment is a special assessment and not the usual HOA maintenance fees. The duty was on both the Seller and Buyer as the first was to disclose and the second party was to inquire.

 

[NC Aggie]

**A: It appears that the assessment is a special assessment and not the usual HOA maintenance fees. The duty was on both the Seller and Buyer as the first was to disclose and the second party was to inquire.

I get that, but my question to the O.P. was whether this lack of disclosure created an unforseen additional monthly/annual expense or was this assessment included in the total amount the O.P. originally assumed he/she would be paying for HOA fees. And in the big picture, if the issue is merely how the asssessment and HOA maintenance fees were categorized on the closing documents then it may make this less of an issue.

 

[HomeGuru]

I get that, but my question to the O.P. was whether this lack of disclosure created an unforseen additional monthly/annual expense or was this assessment included in the total amount the O.P. originally assumed he/she would be paying for HOA fees. And in the big picture, if the issue is merely how the asssessment and HOA maintenance fees were categorized on the closing documents then it may make this less of an issue.

**A: good point. Hard to tell without actually reading the HUD 1.

 

[festival]

I'm not certain that's the case because the O.P. stated that the assessment was for 20 years and that may mean they're being asssessed for a 20 year period, not necessarily that the seller had 20 years of upaid assessments. I doubt very seriously an owner go go 20 years without paying assessments and the HOA not place a lien on the property.

You may be right. For example, if the HOA took out a loan and then made the repayments a common expense to be put into everyone's monthly assessment, then this is not unpaid assessments of the previous owner, it is common expense, so the OP has to pay.

So Condo Dad, what is the extra amount for? Does every owner pay it? Is it in the condo budget for everyone as a common expense or is it only associated with this one condo? What did the HOA disclose to your attorney?