In-Laws' HOA demanding $8000 lumpsum payment
- MortgageOnBlack
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In-Laws' HOA demanding $8000 lumpsum payment
Hoping someone with more experience on HOAs/Home Owner's Insurance Claims can offer some advice on this...
In-Laws recently purchased a town-home with an HOA in September 2020. The real estate listing read the following "2013 & 2014 STORM LITIGATION HAS BEEN SETTLED. ". Fast forward 7 months and HOA is demanding $8000 for the difference in repairs/upgrades from the 2013/2014 storm damage. Most home owners in the the complex are able to use their Home Owner's Insurance for this cost because they were living in the units at the time. In-Laws contacted their Home Owners Insurance and they would not cover the $8000 because the insurance was not covering the home when the damages happened.
On a side note, the HOA fee has doubled in the past 6 months which is making this situation even more infuriating. Any ideas on how to help them avoid paying this $8000 demand? It does not seem right that In-Laws have to cover this $8000 out of pocket. Who dropped the ball here? How can this be resolved? I appreciate any opinions on this and I accept that this is not legal advice. Please let me know if you need more info.
Thank you,
In-Laws recently purchased a town-home with an HOA in September 2020. The real estate listing read the following "2013 & 2014 STORM LITIGATION HAS BEEN SETTLED. ". Fast forward 7 months and HOA is demanding $8000 for the difference in repairs/upgrades from the 2013/2014 storm damage. Most home owners in the the complex are able to use their Home Owner's Insurance for this cost because they were living in the units at the time. In-Laws contacted their Home Owners Insurance and they would not cover the $8000 because the insurance was not covering the home when the damages happened.
On a side note, the HOA fee has doubled in the past 6 months which is making this situation even more infuriating. Any ideas on how to help them avoid paying this $8000 demand? It does not seem right that In-Laws have to cover this $8000 out of pocket. Who dropped the ball here? How can this be resolved? I appreciate any opinions on this and I accept that this is not legal advice. Please let me know if you need more info.
Thank you,
Re: In-Laws' HOA demanding $8000 lumpsum payment
I think you are saying that the in-laws paid $8000 less for their dwelling than they should have.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Since the damage occurred when the previous owners (presumably) had insurance, they can probably claim against their insurance.
However- unless there was a provision in the sales contract- they are under no legal obligation to pass this on to the new owners.
However- unless there was a provision in the sales contract- they are under no legal obligation to pass this on to the new owners.
- quantAndHold
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Re: In-Laws' HOA demanding $8000 lumpsum payment
So...I’m guessing that the seller knew they were (or at least might be) on the hook for $8000 at the time of the sale. Was this not disclosed?
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Good question. The sellers may not have known exactly how the finances would work out. However they probably had some obligation to disclose, and it would make sense to look into this carefully.quantAndHold wrote: ↑Fri Apr 09, 2021 6:44 pm So...I’m guessing that the seller knew they were (or at least might be) on the hook for $8000 at the time of the sale. Was this not disclosed?
Re: In-Laws' HOA demanding $8000 lumpsum payment
File a claim with title insurance company.
Fools think their own way is right, but the wise listen to others.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Conceptually this is the type of thing that title insurance should cover, so I would give them a call. For $8k, it’s worth consulting with a real estate attorney after that if the title insurer won’t cover it.
- MortgageOnBlack
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Re: In-Laws' HOA demanding $8000 lumpsum payment
InLaws are unaware if this was disclosed. The real estate listing did have the verbiage "(2013 & 2014 Storm Litigation has been settled )" which a novice home buyer (they're 1st timers) would assume is a good thing. It's also possible that the HOA is asking for more money per each unit for more bells/whistles with the upgrades (unsure).
I appreciate all of the advice. It feels like this is going to get passed in around in a big circle with no party wanting to accept responsibility. What would be the most cost-effective way to have a favorable outcome in this? I imagine an attorney, but not sure what type of attorney would be best and what the cost is. Please keep in mind this is new territory for my InLaws. I would hate for them to swallow an $8k loss.
I appreciate all of the advice. It feels like this is going to get passed in around in a big circle with no party wanting to accept responsibility. What would be the most cost-effective way to have a favorable outcome in this? I imagine an attorney, but not sure what type of attorney would be best and what the cost is. Please keep in mind this is new territory for my InLaws. I would hate for them to swallow an $8k loss.
- MortgageOnBlack
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Re: In-Laws' HOA demanding $8000 lumpsum payment
I appreciate the 2 tips on Title Insurance - I will have my InLaws reach out to their Title Company to work with that. It sounds like that if that becomes frustrating, the next course of action would be a Real Estate Attorney.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Another potential deep-pocket to consider is the real estate agents and/or brokers involved on both the buyer's and seller's side.
If it was a "for sale by owner" (FSBO) this is one of the risks the buyer may potentially have to bear.
If it was a "for sale by owner" (FSBO) this is one of the risks the buyer may potentially have to bear.
The closest helping hand is at the end of your own arm.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Your in-laws can check their condo purchase agreement and Seller/any HOA disclosures. The title insurance policy should be in that package too.MortgageOnBlack wrote: ↑Fri Apr 09, 2021 6:52 pm InLaws are unaware if this was disclosed. ...
... I imagine an attorney, but not sure what type of attorney would be best and what the cost is. ...
An experienced real estate attorney in their state, perhaps they used one for the purchase?
Re: In-Laws' HOA demanding $8000 lumpsum payment
I would absolutely take this to the real estate agents. The buyer's agent was paid to protect the buyer's fiduciary interests, right?, Right? And the sellers agent should have overseen the disclosure, right? Condo settlements are pretty bread and butter, so both of those agents should have known to protect their clients, right? I mean, that's why you pay these "professionals" to be involved in this transaction, right?
Right? Or are they just passing the responsibility puck along and hoping nobody noticed?
At least that's the fiction everyone agrees to until the bill arrives.
Right? Or are they just passing the responsibility puck along and hoping nobody noticed?
At least that's the fiction everyone agrees to until the bill arrives.
Re: In-Laws' HOA demanding $8000 lumpsum payment
This is certain to end up with the real estate attorney. Might as find one now. They should be able to tell you quickly if something was t disclosed that should have been.
I doubt the real estate agents will even return your calls once they know what’s on your mind.... they certainly won’t pony up any money willingly......
I doubt the real estate agents will even return your calls once they know what’s on your mind.... they certainly won’t pony up any money willingly......
- Supergrover
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Re: In-Laws' HOA demanding $8000 lumpsum payment
In addition to the title claim, (1) politely ask the HOA NOW for any correspondence showing whether/when the Seller knew about the $8000 assessment. (2) try to print out a copy of the sales listing saying "SETTLED."
Just try to gather any documents relating to the assessment - don't wait for title company to take their time getting them. Things "disappear" even in cyberspace.
Also start digging into HOA meeting minutes, their website, etc. to see how easy it was to find this information. I think the Realtor bears some Responsibility here, too. But I doubt you'll get anywhere with that angle.
Good luck.
Just try to gather any documents relating to the assessment - don't wait for title company to take their time getting them. Things "disappear" even in cyberspace.
Also start digging into HOA meeting minutes, their website, etc. to see how easy it was to find this information. I think the Realtor bears some Responsibility here, too. But I doubt you'll get anywhere with that angle.
Good luck.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
The sellers agent was paid to protect the seller's fiduciary interests. right?crit wrote: ↑Fri Apr 09, 2021 9:12 pm I would absolutely take this to the real estate agents. The buyer's agent was paid to protect the buyer's fiduciary interests, right?, Right? And the sellers agent should have overseen the disclosure, right? Condo settlements are pretty bread and butter, so both of those agents should have known to protect their clients, right? I mean, that's why you pay these "professionals" to be involved in this transaction, right?
Right? Or are they just passing the responsibility puck along and hoping nobody noticed?
At least that's the fiction everyone agrees to until the bill arrives.
Re: In-Laws' HOA demanding $8000 lumpsum payment
This is A+ quality advice......Supergrover wrote: ↑Fri Apr 09, 2021 9:22 pm In addition to the title claim, (1) politely ask the HOA NOW for any correspondence showing whether/when the Seller knew about the $8000 assessment. (2) try to print out a copy of the sales listing saying "SETTLED."
Just try to gather any documents relating to the assessment - don't wait for title company to take their time getting them. Things "disappear" even in cyberspace.
Also start digging into HOA meeting minutes, their website, etc. to see how easy it was to find this information. I think the Realtor bears some Responsibility here, too. But I doubt you'll get anywhere with that angle.
Good luck.
- Supergrover
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Re: In-Laws' HOA demanding $8000 lumpsum payment
crit wrote: ↑Fri Apr 09, 2021 9:12 pm I would absolutely take this to the real estate agents. The buyer's agent was paid to protect the buyer's fiduciary interests, right?, Right? And the sellers agent should have overseen the disclosure, right? Condo settlements are pretty bread and butter, so both of those agents should have known to protect their clients, right? I mean, that's why you pay these "professionals" to be involved in this transaction, right?
+1. I bet the Realtor could've found out the pertinent information in a couple of clicks. Sad to say, I've been in this situation myself, only it was about whether a HOA existed at all. The Realtor could've easily found out the info...I made a title claim and they said I did NOT owe the HOA any money. Anyway...long story....I agree 100% that the realtors are supposed to have responsibilities but they often get confused, apparently.
Take notes when you call your realtor and ask them "Why weren't you informed about the special assessment." And when you call the realtor who said "Litigation has been settled."
- Supergrover
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Why, thank you!Normchad wrote: ↑Fri Apr 09, 2021 9:26 pmThis is A+ quality advice......Supergrover wrote: ↑Fri Apr 09, 2021 9:22 pm In addition to the title claim, (1) politely ask the HOA NOW for any correspondence showing whether/when the Seller knew about the $8000 assessment. (2) try to print out a copy of the sales listing saying "SETTLED."
Just try to gather any documents relating to the assessment - don't wait for title company to take their time getting them. Things "disappear" even in cyberspace.
Also start digging into HOA meeting minutes, their website, etc. to see how easy it was to find this information. I think the Realtor bears some Responsibility here, too. But I doubt you'll get anywhere with that angle.
Good luck.
I know a little bit because I've had these things happen to me. How to Advocate for Yourself - I should write a book.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Assuming this wasn’t disclosed, if title insurance isn’t good for this, I’m not sure what it’s good for. All of us have wasted hundreds of dollars or more on title insurance whenever we buy a house. It’s time someone filed an actual claim for the rest of us.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Did they actually buy owners title insurance?
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Do you mean unaware in the sense that it wasn't in the disclosures, unaware in the sense that they no longer have the disclosures, or unaware in the sense that they didn't read the disclosures?
By the way, anything in an RE listing is subject to verification by the buyer. So no joy there. And personally I think the title insurance angle is a red herring, as there does not seem to be any doubt that they own the property. And an assessment is not like an unknown easement that limits the use of the property. After all, an assessment for repairs is not so very different from the unexpected need for an HVAC replacement in a single family home.
I believe the best bet is to contact the previous owners and have them file for the insurance payment they are entitled to. If the sellers did not disclose matters they should have known about (even if not the exact $ amount) then there may be a cause of legal action. At least a nasty lawyer talk letter.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Did the in-laws ask what this meant? It was part of the listing for a reason.MortgageOnBlack wrote: ↑Fri Apr 09, 2021 6:39 pm The real estate listing read the following "2013 & 2014 STORM LITIGATION HAS BEEN SETTLED".
I read it as there had been a lawsuit which is now decided. But it doesn’t say what the decision is. I would have asked for an explanation in writing and for several year’s of HOA expenses and minutes going back to 2013 as a contingency. From later posts, it sounds like there was storm damage which the HOA paid for upfront so owners could still live there (while waiting for unit owners’ insurance claims to be paid so the HOA could be reimbursed).
This seems like the buyers didn’t exercise due diligence after being informed about the past litigation. If everyone had already been paid appropriately, no notice would have been needed in the real estate listing.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Seems to me like you have to figure out how to prove if the sellers knew the $8000 special assessment was lurking out there. Seems like they disclosed the lawsuit and may have not known what was coming. In laws did not do their DD.
Hard to imagine title insurance doing anything about this as it doesn’t affect title of the property.
Hard to imagine title insurance doing anything about this as it doesn’t affect title of the property.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Of course an $8000 unpaid pending lien against the home from an association would affect the title.riverguy wrote: ↑Sat Apr 10, 2021 8:17 am Seems to me like you have to figure out how to prove if the sellers knew the $8000 special assessment was lurking out there. Seems like they disclosed the lawsuit and may have not known what was coming. In laws did not do their DD.
Hard to imagine title insurance doing anything about this as it doesn’t affect title of the property.
Re: In-Laws' HOA demanding $8000 lumpsum payment
When I've purchased property under an HOA before, a standard part of the purchase process was requesting disclosures for current, future, and potential assessments. Did they request that? What do those disclosures say?
If they did not, that's a big miss on their part (or their agent or attorney).
If they did not, that's a big miss on their part (or their agent or attorney).
Re: In-Laws' HOA demanding $8000 lumpsum payment
It's definitely not clear with the the information provided so far that there was an actual lien on the property at time of sale or even now. People are assuming there was one, but HOA may have voted the assessment after the property closed or never got around to filing a lien or is doing it after in laws bought the property.
I do agree the listing agent (seller's agent) could have some liability based on how the listing was worded. May be easier to get an out of court settlement with the listing agent or brokerage than with the seller if they knew information that was not disclosed. The wording in the listing is pretty strong evidence the realtor knew this was not an "ordinary" situation.
Re: In-Laws' HOA demanding $8000 lumpsum payment
This doesn’t appear to be in existence at the time of the sale. The HOA is just asking for it now. Title insurance company going to tell you to pack sand. I think typically you have to buy extra title insurance to get them to even cover liens that are not recorded. If the special assessment was in effect at the time of sale you obviously have a claim against the seller.8foot7 wrote: ↑Sat Apr 10, 2021 8:27 amOf course an $8000 unpaid pending lien against the home from an association would affect the title.riverguy wrote: ↑Sat Apr 10, 2021 8:17 am Seems to me like you have to figure out how to prove if the sellers knew the $8000 special assessment was lurking out there. Seems like they disclosed the lawsuit and may have not known what was coming. In laws did not do their DD.
Hard to imagine title insurance doing anything about this as it doesn’t affect title of the property.
Most likely scenario is that seller disclosed the suit was settled and the special assessment hadn’t been assessed at point. Seller probably didn’t even know one was coming which is entirely plausible given the fact it’s just coming up now 7 months later. Buyer did not do their DD on what was going on with said lawsuit.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Title insurance is a huge ripoff and this situation will likely prove that again. Title “insurers” are the only insurers out there that pay out <5% of premiums in claims.JonnyDVM wrote: ↑Fri Apr 09, 2021 9:39 pm Assuming this wasn’t disclosed, if title insurance isn’t good for this, I’m not sure what it’s good for. All of us have wasted hundreds of dollars or more on title insurance whenever we buy a house. It’s time someone filed an actual claim for the rest of us.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Buyer beware. Not realtor beware. Anyone buying into an HOA property should get all the Bylaws, rules, regulations, minutes of meetings and a form/letter stating what assessments are owed and if there are any special assessments pending or being considered. Though the realtor usually facilitates getting most of this, it is not their job to read it and tell you all about it. Just like the realtor should tell you to get an inspection but they are not responsible for evaluating the report.Supergrover wrote: ↑Fri Apr 09, 2021 9:33 pmcrit wrote: ↑Fri Apr 09, 2021 9:12 pm I would absolutely take this to the real estate agents. The buyer's agent was paid to protect the buyer's fiduciary interests, right?, Right? And the sellers agent should have overseen the disclosure, right? Condo settlements are pretty bread and butter, so both of those agents should have known to protect their clients, right? I mean, that's why you pay these "professionals" to be involved in this transaction, right?
+1. I bet the Realtor could've found out the pertinent information in a couple of clicks. Sad to say, I've been in this situation myself, only it was about whether a HOA existed at all. The Realtor could've easily found out the info...I made a title claim and they said I did NOT owe the HOA any money. Anyway...long story....I agree 100% that the realtors are supposed to have responsibilities but they often get confused, apparently.
Take notes when you call your realtor and ask them "Why weren't you informed about the special assessment." And when you call the realtor who said "Litigation has been settled."
The "settlement" was likely between the HOA's insurance company and the HOA. That insurance wouldn't cover anything inside the walls of an individual unit.
I don't see how this is a title insurance issue. The title was clear and nothing was owed at the time.
Though I'd consult an attorney that specializes in HOAs, the in-laws might be on the hook for this.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
It's good for defects in the title which this wasn't. Of course, in most states, title insurance it is totally overpriced. A few states have taken action. In my state the title company kicks back money to your attorney for title work they do (supposedly).JonnyDVM wrote: ↑Fri Apr 09, 2021 9:39 pm Assuming this wasn’t disclosed, if title insurance isn’t good for this, I’m not sure what it’s good for. All of us have wasted hundreds of dollars or more on title insurance whenever we buy a house. It’s time someone filed an actual claim for the rest of us.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Because of the statistically small percentage of title insurance claims filed each year, it may be difficult for homebuyers to gauge the value of their purchase. However, the low number of claims actually illustrates the effectiveness of title insurance providers in locating and minimizing risks. In fact, a large piece of the premium paid for a policy goes to fund the legwork required to thoroughly research the property's title. According to the American Land Title Association, the typical expense ratio for a title insurance company is 90 percent, compared with 30 percent for a property and casualty insurance company.hookemhorns wrote: ↑Sat Apr 10, 2021 8:55 amTitle insurance is a huge ripoff and this situation will likely prove that again. Title “insurers” are the only insurers out there that pay out <5% of premiums in claims.JonnyDVM wrote: ↑Fri Apr 09, 2021 9:39 pm Assuming this wasn’t disclosed, if title insurance isn’t good for this, I’m not sure what it’s good for. All of us have wasted hundreds of dollars or more on title insurance whenever we buy a house. It’s time someone filed an actual claim for the rest of us.
https://www.firstam.com/ownership/cost- ... insurance/
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Re: In-Laws' HOA demanding $8000 lumpsum payment
I am the Treasurer of a small neighborhood HOA. Whenever a property is sold in our neighborhood, the closing agent will contact me and ask me to provide a statement of account to indicate if any funds are due. This is a pre-close requirement; the closing is not in good order without this. Our HOA recently received a check for a property that was past due on association dues to sold. Laws likely vary by state, but I think the closing agent has some responsibility here as well. I would engage legal representation.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Yet they are able to clear titles in Iowa for a fraction of the price with no title insurance companies.....7eight9 wrote: ↑Sat Apr 10, 2021 10:20 amBecause of the statistically small percentage of title insurance claims filed each year, it may be difficult for homebuyers to gauge the value of their purchase. However, the low number of claims actually illustrates the effectiveness of title insurance providers in locating and minimizing risks. In fact, a large piece of the premium paid for a policy goes to fund the legwork required to thoroughly research the property's title. According to the American Land Title Association, the typical expense ratio for a title insurance company is 90 percent, compared with 30 percent for a property and casualty insurance company.hookemhorns wrote: ↑Sat Apr 10, 2021 8:55 amTitle insurance is a huge ripoff and this situation will likely prove that again. Title “insurers” are the only insurers out there that pay out <5% of premiums in claims.JonnyDVM wrote: ↑Fri Apr 09, 2021 9:39 pm Assuming this wasn’t disclosed, if title insurance isn’t good for this, I’m not sure what it’s good for. All of us have wasted hundreds of dollars or more on title insurance whenever we buy a house. It’s time someone filed an actual claim for the rest of us.
https://www.firstam.com/ownership/cost- ... insurance/
Re: In-Laws' HOA demanding $8000 lumpsum payment
HOA is such a nonsense. Its a free country people! Why would you get Involved with HOA in the first place.
Re: In-Laws' HOA demanding $8000 lumpsum payment
It's worse than that. Title insurers pay only 0.5% of premiums in claims.hookemhorns wrote: ↑Sat Apr 10, 2021 8:55 am Title insurance is a huge ripoff and this situation will likely prove that again. Title “insurers” are the only insurers out there that pay out <5% of premiums in claims.
Title insurers claims a 5% loss ratio, but that's actually a loss and LAE ratio. It includes legal fees, which the rest of the insurance industry considers to be an expense. There is some justification for including legal fees in the loss ratio, but umbrella insurers don't do it.
Re: In-Laws' HOA demanding $8000 lumpsum payment
First American Title Insurance is being very misleading here. They want you to think that 90% of the premium goes to "locating and minimizing risks." It doesn't.7eight9 wrote: ↑Sat Apr 10, 2021 10:20 am Because of the statistically small percentage of title insurance claims filed each year, it may be difficult for homebuyers to gauge the value of their purchase. However, the low number of claims actually illustrates the effectiveness of title insurance providers in locating and minimizing risks. In fact, a large piece of the premium paid for a policy goes to fund the legwork required to thoroughly research the property's title. According to the American Land Title Association, the typical expense ratio for a title insurance company is 90 percent, compared with 30 percent for a property and casualty insurance company.
https://www.firstam.com/ownership/cost- ... insurance/
According to First American's own rate filings, 80% of the premium goes to what is euphemistically called "agent retention." Another 10% goes to operations, 5% to profit, and 5% to the loss and LAE ratio.
Iowa is the only state with a government monopoly on title insurance. Private title insurance has been illegal since 1973.michaeljc70 wrote: ↑Sat Apr 10, 2021 10:27 am Yet they are able to clear titles in Iowa for a fraction of the price with no title insurance companies.....
Iowa Title Guaranty charges only $175 for simultaneous lender and owner coverage on houses up to $750k. It makes a profit, which is paid into the state treasury and used to offset taxes. Here is the ITG rate sheet: https://iowatitleguaranty.org/Public/ITGRateSheet.pdf
Re: In-Laws' HOA demanding $8000 lumpsum payment
this is why you, and your in-laws, should keep a cash cushion. For the unexpected.
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Yeah, no.
First, title isn’t usually run from sovereignty, despite what they may claim or want you to believe. Most people just run it from wherever the root of title begins or, in some cases, 50 years before the last statute of limitations could have run.
Once you’ve run title to a tract of land, from that point onward all you have to do is run title from the last closing date to present.
In the case of a HOA-covered subdivision, the title company would have run title up to the date the unsubdivided land was bought, and then as lots were purchased, likely only from that last purchase date forward.
The title company most certainly is not re-running title from sovereignty forward every time a tract is bought. Not even oil and gas title attorneys do that, and you can’t get title insurance on mineral rights.
Re: In-Laws' HOA demanding $8000 lumpsum payment
In the Seattle area sellers complete a Form 17, which has numerous questions about the property. One of the questions is: "Are there any pending special [HOA] assessments?" I would look to see if a similar form/question was used in your transaction and what the answer was--the answer options on Form 17 are Yes, No and I don't know.
Re: In-Laws' HOA demanding $8000 lumpsum payment
I can’t confirm or deny how title insurance premiums are spent. But as someone who had to sell a condo for a deceased relative who was the original owner of the condo unit, I was stuck with a property that had a history of conflicting deeds signed during the deceased’s ownership.talzara wrote: ↑Sat Apr 10, 2021 12:14 pmIt's worse than that. Title insurers pay only 0.5% of premiums in claims.hookemhorns wrote: ↑Sat Apr 10, 2021 8:55 am Title insurance is a huge ripoff and this situation will likely prove that again. Title “insurers” are the only insurers out there that pay out <5% of premiums in claims.
Title insurers claims a 5% loss ratio, but that's actually a loss and LAE ratio. It includes legal fees, which the rest of the insurance industry considers to be an expense. There is some justification for including legal fees in the loss ratio, but umbrella insurers don't do it.
I started with the title company who agreed the property couldn’t be sold until the conflicting deeds were cleared up. Since I was family, I was able to sort out what had happened and found appropriate paperwork to take corrective actions before listing the property. The title company did upfront research and advising so that the title issues wouldn’t hold up a sale, or come back to haunt me in subsequent sales.
Based on my experience, title insurance is worth more than what I paid for it.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Freedom is an illusion. There are countless laws and regulations that effect every moment of our lives. There are even rules that govern my response to you here.
It appears the OP's in-laws might be on the hook for this one.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
That's what I was thinking. I haven't heard of a municipality where there are no ordinances, laws, taxes, etc. If you think HOAs are bad imagine trying to maintain a building where 50 people had to agree on everything with no rules or order.Californiastate wrote: ↑Sat Apr 10, 2021 2:11 pmFreedom is an illusion. There are countless laws and regulations that effect every moment of our lives. There are even rules that govern my response to you here.
It appears the OP's in-laws might be on the hook for this one.
Re: In-Laws' HOA demanding $8000 lumpsum payment
The potential special assessment should/could have also been disclosed in the HOA budget. My HOA always puts that in as part of the reserve study.
superstition: belief that market will one day come around to your concept of fair value
Re: In-Laws' HOA demanding $8000 lumpsum payment
It seems like looking into the HOA minutes would be a good place to start. If there's any mention of a potential HOA special assessment, then the seller has materially failed to disclose. And my understanding is at that point it's a "gotcha". The seller and especially the seller's agent is culpable. I don't think title insurance will be of any value here.
Re: In-Laws' HOA demanding $8000 lumpsum payment
Your in-laws or their agent/lawyer should have spoken with the HOA before making an offer to determine any upcoming assessments and ongoing repairs/upgrades. Had they discovered that this issue wasn't completed, they could have negotiated with the seller.MortgageOnBlack wrote: ↑Fri Apr 09, 2021 6:39 pm Hoping someone with more experience on HOAs/Home Owner's Insurance Claims can offer some advice on this...
In-Laws recently purchased a town-home with an HOA in September 2020. The real estate listing read the following "2013 & 2014 STORM LITIGATION HAS BEEN SETTLED. ". Fast forward 7 months and HOA is demanding $8000 for the difference in repairs/upgrades from the 2013/2014 storm damage. Most home owners in the the complex are able to use their Home Owner's Insurance for this cost because they were living in the units at the time. In-Laws contacted their Home Owners Insurance and they would not cover the $8000 because the insurance was not covering the home when the damages happened.
On a side note, the HOA fee has doubled in the past 6 months which is making this situation even more infuriating. Any ideas on how to help them avoid paying this $8000 demand? It does not seem right that In-Laws have to cover this $8000 out of pocket. Who dropped the ball here? How can this be resolved? I appreciate any opinions on this and I accept that this is not legal advice. Please let me know if you need more info.
Thank you,
After the fact, they should speak with their lawyer to see if this issue was required to be disclosed in their state or not. A very aggressive lawyer might suggest going after the sellers anyway.
Aside from that, assessments happen in HOAs (hopefully they asked about the history of assessments in this HOA?). And owners are responsible to pay for them. It might be infuriating, but it is what it is. They should attend all HOA Board Meetings to get a sense of any other upcoming issues.
Last edited by JoeRetire on Sat Apr 10, 2021 3:59 pm, edited 1 time in total.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Don't they still have all the paperwork (including all disclosure statements)? Didn't their lawyer keep copies of all the paperwork?
I'm not sure a favorable outcome is in the cards here. But they certainly should run it by the attorney they used when they purchased the place.What would be the most cost-effective way to have a favorable outcome in this? I imagine an attorney, but not sure what type of attorney would be best and what the cost is.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Yeah, but...Californiastate wrote: ↑Sat Apr 10, 2021 2:11 pmFreedom is an illusion. There are countless laws and regulations that effect every moment of our lives. There are even rules that govern my response to you here.
It appears the OP's in-laws might be on the hook for this one.
The town might tell me to adhere to electric code, or where my well can be, but they won’t tell me what color I can paint my house or whether or not I can turn the lawn into a meadow.
I get the FI part but not the RE part of FIRE.
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Re: In-Laws' HOA demanding $8000 lumpsum payment
Even someone diligent about reading the HOA meeting minutes probably wouldn't have gone back to 2013 (or earlier) when it seems this started. However, that phrase in the listing about "litigation has been settled" should have raised a red flag for further exploration. There is a lot of talk about special assessments, but this may not have been a special assessment. Were the "upgrades" mandatory or something the prior owner opted for? Were they all complete before the new owners moved in?
In my state (IL) the legally required disclosure asks (among other things):
-Liens, unpaid assessments, and other charges due within the building
-Projected budget and capital expenditures, as well as information on the previous year’s finances
-Any pending lawsuits or other legal cases involving the condo association/building
-Information on budget, including funds reserved or earmarked for reserves or specific projects
If there was something not disclosed that was legally required I think that is about the only case the OP's in laws might have a chance with.
If the HOA doubled the dues in 6 months it doesn't sound like a very well run association. The reserves and budget should have been looked at before buying.
It can be useful to "accidentally" run into someone (like in the parking lot, in the lobby, etc.) that lives in an HOA you are considering buying into and ask them if they think the HOA is well run, problems, etc. Depending on the size you may even find some info online.
In my state (IL) the legally required disclosure asks (among other things):
-Liens, unpaid assessments, and other charges due within the building
-Projected budget and capital expenditures, as well as information on the previous year’s finances
-Any pending lawsuits or other legal cases involving the condo association/building
-Information on budget, including funds reserved or earmarked for reserves or specific projects
If there was something not disclosed that was legally required I think that is about the only case the OP's in laws might have a chance with.
If the HOA doubled the dues in 6 months it doesn't sound like a very well run association. The reserves and budget should have been looked at before buying.
It can be useful to "accidentally" run into someone (like in the parking lot, in the lobby, etc.) that lives in an HOA you are considering buying into and ask them if they think the HOA is well run, problems, etc. Depending on the size you may even find some info online.
Re: In-Laws' HOA demanding $8000 lumpsum payment
The town can tell you what colors are permitted, if you chose to live in a historical district.TomatoTomahto wrote: ↑Sat Apr 10, 2021 4:04 pm The town might tell me to adhere to electric code, or where my well can be, but they won’t tell me what color I can paint my house or whether or not I can turn the lawn into a meadow.
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