What recourse do I have if escrow/title did not discover/disclose the 2nd HOA related to my home purchase?

Asked by arussell66, North Hollywood, CA Thu Jan 31, 2013

I purchased my home in April 2012, the 2nd HOA was not aware of the change in ownership until Nov 2012 at which time they sent me a bill for $700 consisting of late charges, interest charges, pre lien letter, transfer charges. I don't think I should be responsible for something I wasn't even aware existed. But who is responsible?

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Ron Thomas, Agent, Fresno, CA
Thu Jan 31, 2013
If the HOA did not file a LIEN on the house, then they will go after anyone they find; you are convenient.
You may have to consult with an Attorney.
Is it worth it for $700?
1 vote
Birgit O'hea…, , Orange County, CA
Fri Feb 1, 2013
Matt Bartlett's advice is outstanding and is exactly what I would recommend doing.
0 votes
Thom Colby, Agent, Irvine, CA
Thu Jan 31, 2013
I haven't read the other answers so I apologize if I'm repeating anything. Start with YOUR agent. They should have a copy of the MLS - that's where the HOA is disclosed. If there was only one HOA identified there, your agent needs to contact the Listing Agent. It should be the Listing Agent / Broker's problem for lack of disclosure. I had this happen once and we got the Seller to pay the 2nd HOA costs in advance for 3 years which is the normal time a person would typically own a condo (at that time). The former owner had to pay $7,200 to the new owner. Of course that was in better times and was not a short sale.

Again, start with your agent and they can work it for you.
0 votes
Matthew Bart…, Agent, Glendora, CA
Thu Jan 31, 2013
Hello arussell,

Sorry to hear about your surprise fees. I must say that I'm not an attorney, nor am I offering legal advice. That being said, I see many issues that involve all parties involved in the transaction. Beginning with the Seller, they are responsible for disclosing all material facts. The Listing Agent should have made sure that all disclosures were present and properly completed by the Seller(s). The Covenants, Conditions and Restrictions (CCR's) should have been ordered by Escrow and turned over to your Agent by the Listing Agent along with all other Seller(s) disclosures. Your Agent, should have been familiar with the community and the fact that there was a second HOA. Your Agent missed the second opportunity to discover the second HOA by looking at the homes pre-liminary title Report. Both Title and Escrow should have discovered the second HOA and made sure that all fees were incorporated into the HUD-1 and settled properly during the Escrow process. And if you were infact issued a copy of the pre-liminary title report, you yourself should have noticed this when you read the report.

I recommend that you start with your Agent and Broker. Contact their office and ask to meet with them to discuss the matter. I would also ask for your Broker to include in the discussion the Seller(s), the Seller's Broker and their Agent as well. If you're unable to settle the matter to your satisfaction, then you should contact an Attorney who specializes in real estate law. Be sure to bring all paperwork from the transaction. I wish you luck and hope that you can bring closure to the situation.

Warmest Regards,

Matt A. Bartlett
0 votes
Brian Wilson, Agent, Laguna Beach, CA
Thu Jan 31, 2013
Hello Arussel66,

I would first speak with the HOA about the situation then I would talk with the escrow officer that handled the transaction. I am surprised the 2nd HOA wasn't disclosed throughout the entire process, no mention of it in the Multiple Listing or any escrow docs? I would review them just to be sure before you call. Did you receive a HOA package of their rules and regulations, minutes to their meeting and more (typically sent directly from escrow to you)? With 2 HOAs I would expect you to receive 2 of those packages to review during your contingency time period.

The HOA dues are typically the responsibility of the owner of the property. But you may have to argue that you did not get any benefit of the HOA since you did not have access to the facilities they support (assuming they offer some value to you as the new homeowner). They may be willing to negotiate if you have no luck with escrow. I would also contact your Realtor, if they work in the area they should have knowledge that your community was serviced by two HOAs.

I'm really surprised the transfer didn't take place at the close of escrow,

Good luck to you,

Brian Wilson, Realtor
949-933-0852 cell/txt
0 votes
Mack McCoy, Agent, Seattle, WA
Thu Jan 31, 2013
Ultimately, you are. Have you discussed this with the 2nd HOA?
0 votes
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