I purchased a condo and before signing the purchase agreement I told my agent that bylaws and the HOA was very important to me so I wanted to review the bylaws before making an offer. My agent suggested that we write the agreement contingent upon acceptance of the bylaws and we did. After reading the bylaws and the seller disclosure I had more questions about the HOA. I needed to know the monthly dues and what that covered. I also wanted to know if the HOA held the master insurance policy because the legal jargon in the bylaws was a bit unclear. My agent came back and confirmed that the HOA held the policy and I was provided with a break down of the monthly dues and what they covered. The sellers were the Presidents of the HOA so she received her documentation directly from them and their agent and she never let us have contact with the sellers or their agent. Until after the offer was accepted. After that she went on vacation and told me to contact the sellers’ realtor with any questions I had and I never seen her again. She didn’t show up at the closing either. After moving in I quickly discovered that there was no HOA. No one was collecting dues and the insurance policy that the HOA supposedly held was not held by the HOA at all. It was held by an investment company that cancelled the policy not long after I moved in even though I had pay back the sellers at closing for the insurance policy that was paid up through the rest of the year. That money was refunded by the insurance company and it’s gone. I contacted both agents. My agent’s response was that neither the realtors nor the sellers can be held responsible for what happens after they leave. When I try to contact the seller’s agent he informs my agent who then responds by saying no one can help me. I was forced to obtain full coverage Ins on the structure and the land but I don't own it, the fictitious HOA owns it. I made it clear before purchasing that the HOA was important to me. I know the sellers are responsible for disclosure fraud, but what about the realtors? Can they be held responsible? I believe they knew about the HOA all along and now I am afraid I won’t be able to sell a condo that does not have an HOA. The HOA is the reason many people buy condos.
Jennisam223

You have a problem that only your contract and probably an attorney reviewing it can answer. Our State contract is very specific about which HOA documents are to be provided and even has a buyers checklist (see link below). Sorry, but not knowing your states contract I can't be of much help.

http://www.dora.state.co.us/real-estate/contracts/0604/CICC-05-04.pdf

Jenni you step into everyone involved. Name each an every individual as a defendant. Go after all assets you can find, kids college fund, collections, gifts, try to pierce any corporate veils you can find. If what you say is true, step into all of them. Make em pony up their deductible.

I don't understand what happened to the HOA? There had to be one when the condominium was built. It owns the common areas etc.

Did you see a budget? Did they give you info on the fees in writing? If the Realtors gave you fraudulent info you should hire an attorney and go after them.

Did you get a mortgage? Normally the lender will check the status of the homeowner's association and the dues etc. If the association quit meeting through lack of interest maybe you can ressurect it. This is definitely a strange situation. Really doesn't add up.

It appears there was an HOA at one time. The bylaws were written and filed with the county. The bylaws state the HOA owns the common elements and holds a master ins policy on the structures and common elements. I had my realtor confirm for me that all of these things were taking place. But it seems the HOA dissolved or just went away in 2005 and that was 2 years before I purchased the property. When I purchased the condo I was told it was active and I was given documentation to support that. I am now learning that it was a front to get the property sold.

I have all of the documents. I have the budget, the HOA questionnaire, the seller’s disclosure and string of emails between me and the realtors. I have filed a complaint with local office that reviews complaints against realtors. The sad part is that I really do love my home. The scary part is the unknown. Who does own the land? I am sure I don’t own it but I do insure it just in case something happens like a fire starts or pipe bursts. But I don’t know if the unit connected to mine has insurance. If someone is hurt on the property I assume they would sue me personally since there is no HOA that holds a master policy. There are so many “what ifs” that is makes me question whether I should keep the property.

You are sooooo correct, nothing is adding up. After contacting the sellers and realtors for clarification you would think they would be willing to clear things up if there was truly nothing to hide. The lender required the sellers to complete an HOA questionnaire. Since the wife claimed to be the HOA President, she filled out the docs and clearly stated that everything is up to date and she signed her name as the HOA President. After moving in I learned very quickly that things were NOT as stated in any of the documents I received. I contacted the state of Michigan and in order to resurrect the HOA someone would have to file the missing annual statements from 2005, 2006, 2007 and now 2008 (due in Feb). I have no idea if this info even exists. I’ve tried to contact the neighbor connected to me and he acts as if he doesn’t know what I am talking about or doesn't respond at all.

You said it right when you stated that this is a strange situation. I am so frustrated with the whole thing that I want to say forget it. But I am afraid that if I don’t clear this up now it will come back to haunt me.

Yeah I agree you can't forget it. Unfortunately to protect your investment you have to jump in resurect the association and fix it. How many condos are there in your complex? You should contact as many of the owners as you can. Is nobody paying dues or did someone abscond with the money? Read the bylaws (with an attorney) figure out how many to make a quorum and vote in a new set of officers and fix it.

I would call the local Real Estate Commission and go over the situation with them, call the Broker for the company that the REALTOR worked for and explain the situation. Perhaps you can collect enough damages from him (settling out of court)to set up your HOA, recharge your budget and get back on track.

Who pays the water bills?

I am not a lawyer and not giving legal advice!!!!!only opinions.

Find a lawyer that goes to trial. Do a query in the federal court house if you don't play poker with anyone that goes to trial. Don't get a lawyer who hasn't won at least 4 cases in the last 2 years. Othewise the advice you'll receive will reflect their lack of relevant experience.

Don't screw around waiting. Time is not on your side. Memories fade, evidence gets misplaced and assets are secreted.

I'm not sure why you believe the agents knew that the HOA was inactive. You asked for and reviewed the doc's, the seller as President of the HOA surely knew the correct status of the Association. The seller appears to be the one who mislead you and probably the agents. The agents, probably on the advice of their attorney, are stepping back and not giving legal advice. You need to contact a good real estate attorney quickly.

While your lawyer is doing his thing find out how to create the missing statements and do what needs to be done to get the association back on its feet. Without an association the whole place lose value quickly.

you should sue the sellers since they did not disclose the inactive HOA. It's called a fraud.

HOA Doc. should showed it unless they did not give you the doc.

talk to attorney for legal advices

I would discuss this with a real estate attorney and both agent's office managers...Your contract should have somewhere written in it about mediation & what actions should be sought if a dispute arrises. (I know ours do, but state to state can vary)

Jennisam223 If you hope to resolve this matter, it will no doubt require legal action or the threat of legal action from an attorney.

Irregardless of the free advice you may obtain from a website, you may still be required to take some form of legal action, which may be beyond your expertise.

Your situation requires competent legal advice, from an attorney who may take your case on a contingency basis (you never know, unless you ask) and therefore you should consult with an attorney.

An attorney should, after reviewing all of your documentation and such other evidence as may be material and admissible in a court of law, and then be in a position to advise you accordingly.

An attorney may determine that other parties may be successfully held legally liable for their actions and/or inaction and suggest that a civil suit be filed on your behalf for negligence, breach of fiduciary duty and damages, provided that the aforementioned allegations can be proven in a court of law.

An attorney may also determine that you were the victim of a criminal act, possibly fraud and suggest discussing the possibility of filing a complaint with the District Attorney’s Office.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information