My mom just moved into a new house. Last week someone from the homeowners association arrived and said that she owes $2000 for the driveway assessment. (This is just one of many reasons I would never live in an HOE)

The HOE has been telling owners for the past year that this would be happening, and the prior owner of the house did not disclose this during the closing. There is no chance she did not know about this $2000 assessment.

They did my moms driveway a week after she moved in, and she was never made aware of the assessment until after somebody from the HOE called wondering why she had not paid it yet.

My logic says that my mom’s realtor should be calling the former home owner’s realtor and saying they need to cough up the two grand.

Pipe dream?

Is my mom on the hook for this two grand?

To add, this is in Minnesota.

If they did the work after she moved in, then she probably owes it, any assessments and the HOA documents rules etc should have been provided at closing to your Mom.

Sounds like you have some work to do to see if it was in the disclosures, if the seller failed to disclose it you'd need someone to go after them for the money, you'd want to know when the driveway assessment was instituted to prove it was prior to the work and sale.

Copies of any communication to the HOA members regarding the assessment would be helpful if it was sent prior to closing to prove the seller failed to disclose...

Not sure what remedy you have short of legal action though...

Not an attorney but I would think that would equate to a known defect and require disclosure by the seller. Recommend you consult an attorney schooled in these matters.

quote:

Originally posted by Ronin1069:
(This is just one of many reasons I would never live in an HOE)

Having recently moved from a HOA subdivision to a non-HOA subdivision, I can confirm that it's a huge improvement.

I'll take a couple neighbors with a few weeds in their yards over the constant headache from the petty scheming of bored retirees on power trips. (I had even joined the HOA board naively hoping to curb some of that, but simply found myself outvoted at every turn.) Besides, there are already city ordnances and Code Enforcement to handle the egregious stuff.

I do not know the legal requirement, but in most states, the failure to disclose known fees and assessments, it is cause for action.

So, yes, have her realtor initiate contact.

Document everything and contact the the closing attorney's office. They were paid fees, and will often advise on "after closing discovery" issues. And that will be more concise and correct to her dilemma.

I hate liars and thieves.

People who purposefully leave out details they know will likely cause them less in a sale or responsibility to remedy. (no matter what the "deal" is)
I understand caveat emptor, but home buying is more than inspecting the apple for a worm.

Wouldn't title insurance have some responsibility here?

This would be covered by state law.

It may be that you could have analogous laws in MN, so hopefully this NC-specific bit may prove useful.

Anyway, in NC, a seller has to fill out a pre-sale disclosure. Our form has a whole section on homeowners association issues. It's a long form - link in case you want to see it - questions 32-38 deal with HOA.

I think the remedies here after the close boil down to the buyer suing for fraud, misrepresentation and/or breach of contract if there were issues that should have been disclosed, but weren't covered in the disclosure doc. Not an inexpensive remedy.

Again, MN law is going to be unique and this is only to give a sense of how another state deals with this. Hopefully an MN real estate agent or attorney will chime in.

Unless it's a hill you (or she) want to die on, pursuing this via a lawyer is likely going to cost far more than 2K. You might get lucky and win, or unlucky, and lose.

She got a new driveway out of it for $2000 bucks.

quote:

Wouldn't title insurance have some responsibility here?

That was my first thought. May be different in other places, but that's one of their jobs ahead of closing.

Check the closing documents, it might have been disclosed in writing in the agreement but not "verbally" disclosed...

quote:

Originally posted by a1abdj:

quote:

Wouldn't title insurance have some responsibility here?

That was my first thought. May be different in other places, but that's one of their jobs ahead of closing.

I had to file once due to a property tax underpayment that the title company missed during underwriting.

Pretty sure she is responsible for the improvement even though unexpected.

The question is would this have been a deal killer for buying the property?

Here the assessment would have automatically been disclosed in the form of the HOA docs. Escrow will not close without the HOA docs.

So, chances are it was disclosed in writing, and it was up to your Mom (and/or her agent) to read and learn about.

Also, I'm fairly certain a standard purchase agreement has some disclaimer that taxes, assessments and the like after the closing date are the buyer's responsibility, and that the buyer is advised to check.

I don't necessarily think the lack of disclosure counts as a latent defect as the existence of the assessment would be publicly or readily ascertainable if your Mom and her agent had conducted regular diligence.

Also, from a fairness perspective... the condition of the driveway was readily observable when she bought it. Your mom bought an old driveway. That's what she paid for. She's getting a new driveway, not the old owners. Why shouldn't she have to pay the assessment for the new driveway she is benefitting from?

quote:

Here the assessment would have automatically been disclosed in the form of the HOA docs. Escrow will not close without the HOA docs.

It should have been no doubt in the HOA docs, and someone should have caught that there was a $2K assessment outstanding, however it appears that the assessment isn't due until the work is done. Again see if it's in her closing documents.

quote:

Also, from a fairness perspective... the condition of the driveway was readily observable when she bought it. Your mom bought an old driveway. That's what she paid for. She's getting a new driveway, not the old owners. Why shouldn't she have to pay the assessment for the new driveway she is benefitting from?

Well the old owner used the driveway and wore it into the state where it needed repair. He should have been assessed prior to the sale when the notice of assessment was voted into place on the property.

Perhaps the approved assessment allows for homeowners to pay post completion of the work.


Seems that's not the question at hand...

The important issue is, was the assessment in place prior to the sale by the HOA, did the HOA and owner conspire to hold off doing the work until the sale was completed, thereby transferring the expense to the new owner while the property was up for sale.

It would be interesting if the HOA has copies of notice to the owner of the pending assessment, in addition, it's interesting that her driveway just happened to be scheduled to be completed right after the sale.

1. What was the date of the assessment?

2. Who was the owner of the property on the date of the assessment?

As long as they are permitted to make such assessment by virtue of the governing documents for the association, typically the owner on the date of the assessment is the responsible party.

At closings, payoffs are usually only requested that are good for 30 days or the date of the closing. Some do also ask for or get information on future assessments if known. The payoff response is typically binding on the association as of the date specified on it.

This is just generally how things like this work, which may not apply in her case.

After further consideration, I'm going to go with the others and suggest looking more closely at the assessment date. Rereading the OP's post, it is unclear whether the assessment occured before or after closing, and whether Mom just received the bill after close. My original read assumed that Mom closed on the house, then got assessed for the new driveway, got the new driveway, and now is mad that she didn't know about the upcoming assessment/expense at escrow close.

If the assessment was actually charged prior to closing, the seller should have paid the assessment or escrow should have paid the assessment out of closing. Similarly, taxes that are assessed prior to closing can either be paid up by the seller or paid out of escrow.

Here, if the assessment was actually made before close and the previous owner simply pushed the bill payment date back after close, then the contract should be fairly clear who is responsible for the charge.

From a fairness, perspective, however, I'm still going to go with "Mom thought she was buying an old driveway, getting a new driveway paid by the previous owner would be a windfall."

I was a volunteer (sucker) on our very small HOA once. The way it works in Colorado:

Title company contacts the HOA and has them fill out a Title company form with questions about fees, assessments, etc.. It is the responsibility of the HOA to provide this to the title company. If they do not, and back dues, assessments, etc... are owed, the HOA is SOL and can't collect. The paperwork I have seen asks if there are known assessments in the future. If so, they must list them. This would then be provided to the buyer at, or prior to closing.

People think the shittiest job is HOA President. It's not, its HOA treasurer (our treasurer was responsible for responding to the constant stream of inquiries from the title companies). Our HOA is only 99 homes, has very few restrictions, and its still a PITA being on the board. Never again.

Read the disclosure.
Ask your realtor if she knew about this.
Ask the closing attorney if this was disclosed and who is responsible.
After you get those answers you'll have a much better idea where to go with this.

This should have been disclosed by the seller!

I'd go after them legally, that's BS

Come on guys, its just a seller pulling a quick one. Here in Kentucky, slicksters have been shot for less!