Best of Luck,
Century 21 Tenace
The HOA didn't file a Lien, so the Title Company wasn't aware; there was no way of them knowing: So you can't go after the Title Company.
The HOA apparently lied; they will do that.
And the Seller either lied or had their head in an anal position, (I would opt for door 1).
Either way, you are probably in a LEGAL situation, (know what I mean?)
Good luck and may God bless
This is my opinion. The seller is responsible to pay the back HOA dues, and if they failed to, the new owner is NOT responsible. The HOA has legal recourse to go after the prior owner for any dues assessments that occurred when that person/persons owned the property. NOTE HOWEVER, it all depends on what the purchase contract says. The standard purchase agreement says seller is responsible to pay the HOA dues current at the time of closing (as well as any delinquent property taxes or other liens) and that title will pass free and clear to you, the buyer.
If you received a title insurance policy at the time of the purchase, which you would HAVE TO if the purchase was financed, then the title insurance company or your lender for that matter would not have let the sale close without the delinquent HOA dues (including late fees, etc.) being paid off in full at the time of the closing.
Look through your escrow documents for the title insurance policy, and I would contact that company to find out what the heck happened.
Your purchase agreement should have contained verbiage stating that title would be passed free and clear to you and that HOA dues and property taxes would be PRORATED TO THE CLOSE OF ESCROW. If the seller failed to pay a delinquent amount, they may have been in breach of the contract, unless the seller's addendums contained language to negate the seller's responsibility to pay these items current as of the closing date.
You can start with contacting escrow and the title company to find out who screwed up, but if the HOA is dead set on pursuing you for unpaid HOA dues, you want to deal with this head-on ASAP. I would definitely call them first and let them know you are the new owner. You may need to retain counsel if you don't get anywhere.
Maria Rosino-Miracco, CEO
Maxum Realty, Inc.
CA DRE# 01831224
CA State Bar # 205544
I see by your zip code that you are in San Diego County and, for the purpose of answering this question, I'll assume you used the California Residential Purchase Agreement for your purchase. On page 5, paragraph 17 it clearly states that, among other things, the HOA fees shall be "PAID CURRENT" prior to the close of escrow. If your closing date was in the middle of the month, then the HOA fee would be prorated between seller and buyer. Escrow is the one that handles money coming in and money going out during the escrow period. They should have communicated with the HOA on this matter to ensure all dues were paid current. If the former owner was in default on their HOA dues, this should have been brought to your attention prior to closing. I know the bankruptcy court considers delinquent HOA dues a personal debt and the remedy is for the HOA to pursue this debt in collections. You said you received a letter suing you. Was this letter from the HOA or an attorney? Based on the Purchase Agreement language, my guess is that someone is using heavy-handed tactics to see if they can get the money from you. I suggest you contact the agent that represented you in the purchase and have them put together a letter stating your position and send it to the party that sent the letter. If that agent is unavailable, then talk to the broker of record. I recommend that you do not let this go on for much longer and create a bigger problem for you which may affect your credit. Good Luck!
You will want to contact an attorney. My guess is that the escrow company is not responsible for collecting these fees unless the HOA requests this or has placed a lien on the property. The real estate agents . . . kind of obliged to verify that the basic terms of the Purchase & Sale Agreement are completed, so the Listing Agent would have to demonstrate that they delivered the required HOA documents and your agent would have to demonstrate that they passed them on to you. The Lender absolutely would have wanted to know about this.
Basically, the new owner is on the hook for six months of unpaid HOA dues. The old owner? The HOA has to file a judgement against for anything in excess of that.
Get an attorney, they'll get you through this.
All the best,
Good luck. I hate to hear of stuff like this happening.