The legitimacy of the contract probably only really matters if you have to go to court/arbitration to enforce it.That said, your title company would be a good place to start in terms of getting a legal review, I'm sure they have a real estate lawyer(s) on staff or retainer depending on the state.

I was formerly in law enforcement and saw a lot of this kind of thing with people repeatedly calling in for burglars in the attic, imagined break-ins, etc. 

Treasury’s Financial Crimes Enforcement Network.

I have had one of the worst experiences with rehabbing a home in Glendale Heights, IL (Suburb of Chicago) with the city inspectors. Some of the most picky, arrogant, expensive, nastiest, non-cooperative inspectors tha...

If the Association decided for whatever reason the statute did not apply to your situation and filed a Claim of Lien to enforce the shortage you could resubmit the claim to the insurer and see if they provide coverage. 

Condo Karen is much worse than some former builder retired into a code enforcement role.

Tim Gordon   here are the rules from the state of CA BRE pretty clear cut really..http://www.dre.ca.gov/files/pdf/Within_this_State_Advisory.pdfgive it a read and let me know what you think... it really comes down to enforcement. and not getting anyone pissed at you ...

While at dinner the women were talking and the guys were looking at some pictures of crime scenes . one of the guys is in law enforcement in Baltimore . 

http://www.seattle.gov/sdci/codes/codes-we-enforce-(a-z)/just-cause-eviction-ordinanceBest of luck!

If the City has put an ordinance in place they're going to enforce it 99% of the time.