Disclosure required regarding possible assessment from HOA?

14 Replies

Hi fellow investors!  Got a question that I'd love input on.

I purchased a condo in Florida in February of this year.  It is in a small 8-unit community that consists of three buildings:  2 duplex-style buildings on the left and right, and an L-shaped 4-plex in the middle.

After purchasing, I asked for and received the past 7 years of HOA documents (as this is the right of all property owners according to bylaws). While reviewing them, I learned that both of the duplex units were experiencing foundation issues/sinking floors over the past couple of years. The board members had visited the affected units to see what was going on and this was a known issue. The seller of my unit was one of the board members and was well aware.

Fast forward to now: I recently got a notice from the HOA that a probable special assessment will be coming to each homeowner to pay for the foundation repairs for these units. The HOA had tried unsuccessfully to get insurance to pay for repairs, but insurance has denied the claim.

So my question is whether or not this is something that should have been disclosed legally, or whether it is simply a case of "buyer beware" and now it's my problem to deal with $$$$$$$$$$.

Anyone have insight?  My husband thinks I need to consult an attorney which, of course, is also a good idea and I am considering but I thought I'd touch base here beforehand to find out if the "hive mind" has any collective words of wisdom or experience that would apply.


Normally you get the resale package BEFORE closing, not after. I can't speak to TX law, but in VA a buyer has 3 days from the day of receipt to terminate the contract based on what in in the documents. Include in this report is a reserve study, which outlines the required repairs an expenses for the next 10 years. This study has to be completed every 5 years by an engineering firm licensed to do them. In VA, and I would guess in every state, it is illegal to not disclose a latent defect. ) A latent defect is defined as a fault in the property that could not have been discovered by a reasonably thorough inspection before the sale. Did you have an inspection or did you waive this? Why didn't you get the documents before closing?

A seller or property owner can not predict a special assessment that might occur 7 months after they sell the property

you need to assess if the seller has any money and do you want to spend thousands chasing them for years even if your right and have the right to sue.. or just pony up the money and pay for the fix.. 

although home inspection should have got something that was glaringly bad and of course you should have read the docs prior to closing that you got from HOA... Especially in FLA or TX were foundation issues are more common than other areas of the country.

Sounds like the foundation issues do not relate to OP's unit... and that an insurance claim was in process when he closed. The way I read it, all unit owners are being assessed to fix a structural issue affecting two of three buildings. 

If the $ is big enough it might make sense to consult with an attorney to determine if this was handled properly by the seller/condo association as concerns prospective purchasers.

Thanks for the input folks.  I did go back and look at all the disclosures and such.  The disclosures simply stated "The board is reviewing repairs needed in Units D, and A/B.  Reserves should be adequate."  There is no further discussion about the nature of repairs.  This is not really a red flag, as there are ongoing repairs and maintenance for any condo, and well-run associations take care of these things on an ongoing basis.  My unit's doors were fixed as well as a couple other minor things.  It's an older building.  Stuff happens.

However, I think the *real* issue is that my agent miscommunicated to me on TWO occasions about the repairs.

First was this, when I was contemplating the purchase (emphasis mine):

"Also, regarding the disclosed repairs for the other building. Here is the insurance claim info that will be covering the repairs.

(from Seller's Agent):  Sellers have disclosed that units D,B and A located in the other building need repair. The condo Association has filed a Claim for the repairs. Here is the policy number....

Please allow this E-Mail to serve as confirmation that the new claim reported for xxxxxxxxxxxxxx association, has been received and the claim number for this loss is XXXXXX. The desk adjuster assigned to this loss is XXXXXXX."

And then after the offer was accepted and I requested HOA financials/most recent minutes (again, emphasis mine):

"Attached please find the minutes from the last meeting for the condo. It mentions the repairs needed to the two units. If you recall that is being covered by insurance and I previously sent you the claim number and contact for that." 

I'm not looking to sue anyone, certainly not my agent.   I will most likely suck it up and pay the assessment.  I am disappointed, though, that 1) I trusted the agent without following up on whether the insurance was actually covering the repairs and 2) the agent made an assumption that just because the insurance claim had been filed, that the insurance company would actually cover the claim.  Oh, and 3) that the *original* disclosure said that the reserves should be adequate to cover the repairs.

Am I doing the right thing to let it go?


Patti, I did have an inspection, and those units that are affected are not my unit.  My inspector did not inspect the other 7 units in the condominium community.  He inspected my unit only.

I did receive a seller's disclosure and it said:  "The board is reviewing repairs needed in Units D, and A/B. Reserves should be adequate." 

There is no required reserve study that I know of in Florida.  The documents I received after the sale are the 7 years of meeting minutes that any *owner* may request.  I was not privvy to these documents before becoming an owner.

Max -- the seller's disclosure said only "The board is reviewing repairs needed in Units D, and A/B. Reserves should be adequate."   There was no section to discuss the foundation, specifically.

Russell - this is not about prediction, but rather whether the extent of the disclosure provided at the time of sale was adequate.

Jay -- exactly.  That's what I'm trying to determine.  

Tom -- right.  Foundation issues not related to my unit.  I think the assessment will probably be maybe $10K or 15K?  Hard to know for sure.

@Connor Heim I’m sorry to hear that you’re getting stuck with an assessment. It sounds like it will be expensive/impossIble to collect anythIng. What do you think about asking the agent to rebate part of her commission on next transaction (if you feel like working with her again)? It wouldn’t cost her anything in cash and you could put less down on next investment. If it gets to it, the threat of a complaint to real estate commission is pretty powerful in TX so maybe it’s the same in FL.
@Connor Heim It sounds to me like there was a reasonable case for them to assume the insurance would cover it. However, the agent didn’t control the insurance company, and they, for whatever reason, didn’t allow the claim. While I do think the agent should have been more careful with his wording (should cover, not will cover) I think you’re just seeing an unfortunate circumstance come to fruition. I would say, pay the tuition, and next time verify that insurance has said they would pay the claim, instead of it being in processing.
@Connor Heim I have a sImIlar sItuatIon on a Condo I own. We’ve owned it two years and now they are voting to increase the HOA dues 3 fold to cover some pressing repairs. So frustrating.