Seller lied about the HOA fees, what can I do?

Question

Hello BP,

My husband and I recently closed on our new townhouse. During the whole process we were informed that the HOA fees would be 143.00. We let our lender know and it was stated on all the paperwork. As time went on, and we got closer and closer to closing, the seller began to back track on what he would fix and pay even through we had already written up contracts on everything. It was a major hassle because he was dead set on not doing any repairs or shell out any money for the closing cost. The night we were suppose to close he calls my agent and states since he's going thru a divorce that he will only pay half, of what he agreed upon before hand, of the repairs. We threaten to pull out since he was breaching contract and trying to find loopholes on how to sell without having to pay or fix anything.

The whole process was so frustrating.

After a stern talking to by his agent and my agent he agrees to everything he stated before and we finish the closing. Today, a week later, I call the HOA company to get an update on the work order I put in for the roof. It was then that the HOA owner informed me that they will be raising dues next week for a new project they all voted on months prior. I told him I had no idea what he was talking about and he seemed confused since he said the seller should have brought this up at closing. Instead of us paying 143.00 a month it will now be 275.00 a month, for 7 years! I was taken back because all our financial planning was centered around the 143 dues. The HOA owner mentioned that the seller has known well in advance that this was happening, he even voted on it himself. He suggested a call the law firm we went thru for closing for more information on what to do.

I left them a message and I'm waiting to hear back but I'm curious if I have any legal grounds here. I would have not went thru with the closing if I knew the true cost of the HOA fee. I know the seller knew that and that was his main reason for not stating it before.

Do I have any options here? Is there any way I can reverse this deal since the seller purposely withheld information?

Linda Weygant · Answer

There are two issues at play here.

First, the seller is absolutely required to disclose a pending HOA Special Assessment (since the time period on this is fixed, it's a Special Assessment, not a dues increase).

Second, part of your due diligence phase is HOA document inspection. It should have been a contingency in your contract. You should have asked for and been provided HOA documents including financial statements, budgets and meeting minutes. In those meeting minutes would have been discussion of the dues increase.

If you did not have this contingency or you did not ask for the proper documents so you could enact this section of your contract, then this is where your burden lies. If you were provided the documents but never bothered to look through them (more common than you might think), then much of the burden shifts to you because, even though the seller did not disclose them up front, it was disclosed to you in this paperwork.

If you were provided the HOA documents, but there is no mention of the dues increase in the meeting minutes, then some of the burden shifts back to the seller.

So part of this is on the seller, but part of this is also on you.

Now, here's a tip.

If the special assessment is for work that is already done, but they are just assessing the homeowners now, you might be able to make a case that the burden of the Special Assessment is on the seller. So the entire value of the Special Assessment could be 100% the seller's burden.

I would call up a real estate lawyer and get a consultation on the topic. It could be worth a few hundred dollars to find out the answer to this. Before you call, know in advance if you had the contingency in place, whether or not the documents were provided to you (or if you didn't ask for them) and what was in them. This will help the lawyer guide you.

Carl Fischer · Answer

@Porsche Thompson

You may have an option with the title company and or the HOA itself. Most closing require th HOA fill out a form showing dues, any capital expenditures, etc. This should have been verified by the title company. You may be able to file a claim with the title company.

It is water under the bridge now, but in the future do your own due diligence with the HOA and everyone else as well. You will have to get to know them anyway.

Seller lied about the HOA fees, what can I do?

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