Hoa Disclosure Issue florida

[Shane S.]

Hello Everyone

First post on bigger pockets. Thanks in advance for all of your replies. I've got a question about an hoa disclosure I was provided by a seller. What first brought me to this deal was the low monthly hoa fees, which were listed as $81 a month and $982 a year on the mls. A few days after going under contract for the 329k town home, we were provided the hoa disclosure, which stated that the hoa fees associated with this community were "$245.50 per quarter". A few days after closing we realized that that disclosure was was completely inaccurate, and that the quarterly fees were more like $745.50. Obviously we should have contacted the hoa and verified the fees before closing but unfortunately we did not. We also didn't catch it at closing via the hoa estoppel. I obviously take some responsibility for not doing due diligence but are the sellers who provided the incorrect amount on the hoa disclosure liable. After all isn't a disclosure a legal document? The seller lived in the home for over a year and there was never an increase to the hoa while he was living there, yet he still provided the disclosure that was off by $500 quarterly. That's a 2k difference per year. Any input is greatly appreciated.

[Phil B.]

That's interesting. I'd be curious to know the correct answer. My guess is you'd need to discuss that with a lawyer or at a minimum, your real estate agents broker, assuming it wasn't FSBO. I think a lot will matter upon the disclosure itself and how it was written but that would likely be for a lawyer to interpret.

[Bill Brandt]

In Nevada you have 3 days  to read and agree to the Hoa disclosures I assume there’s something similar in Florida. Those forms should be from the Hoa not the seller. Are you saying the official paperwork from the Hoa had a misprint, for years, in one of the few parts that every buyer would have read? Or did the Hoa increase the fee during/after your purchase? You could ask the seller to provide cancelled checks showing they paid what they think, you could bring your printed copy of the Hoa forms to their management, you could ask the owners of any identical sized properties in the same Hoa. (In case it’s not the same at every property but based on sf.)

LMK what happens, haven’t seen the Hoa be wrong before. 

[Russell Brazil]

Did your agent get you a copy of the HOA documents, rules etc?

[John Barrows]

Prior to removing the inspection contingency, the HOA delivers to buyers a copy of the CCR's, A Budget, Copy of minute's by the board, Rules & Regulations and any assessments that will have to be paid at closing, along with the current monthly HOA DUES. As a Broker representing the client, these items have to be delivered in order to fulfill the inspection contingency.

What if the Condo HOA will be replacing the roof and an assessment of $10K for each unit, will be assessed? Same with the monthly HOA DUES. What if the HOA knew the HOA DUES were being raised and made false misleading statements. The HOA, they have to rightfully disclose this information to the new buyer by law. If a buyer see's these items and says NO, I will not pay these items then can REJECT THE INSPECTION and cancel the P&SA.

Sounds like the buyer didn't have any of these items met do to the fact the HOA may not have disclosed the correct HOA amount during the inspection period. That's a real problem going forward.

[Patricia Steiner]

First, here's the law:

"Florida Statute Section 720.401, requires owners of real property subject to a homeowner’s association(s), to deliver to a potential purchaser the Disclosure prior to contract execution."

That states PRIOR to you signing the contract to purchase, you're to receive disclosures. If not provided, the buyer can cancel the contract three days prior to closing with full return of escrow.

The title company would have issued an Estoppel to the HOA to inform them that a sale was pending. From that, settlement information would have been provided for the seller side and documents pertaining to your ownership including fees would have been provided to you as the buyer via the title company. With that, you would have been given disclosure directly from the HOA.

Once you close, it's pretty much a done deal. The state protects you all the way up to three days before closing before "let the buyer beware" - which Florida Real Estate Law is based upon is in full effect.  You have responsibility to do your due diligence.

Go back through your closing package from the Title Company. Your time to cancel the contract ended three days prior to closing.

[Elizabeth Shelby]

I want to start by saying I am a realtor not a lawyer.

You don't say if you used a realtor or not or whether a FAR BAR contract was used, but either way 'Caveat Emptor' applies, meaning the buyer has the responsibility to check the accuracy of the information given to them.   

On an 'As Is' contract (FloridaBAR-ASIS-5X) chapter 10 (g) on line 221 states - HOMEOWNERS ASSOCIATION/COMMUNITY DISCLOSURE: Buyer should not execute this contract until Buyer has received and read the Homeowners Association/Community Disclosure, if applicable.  

This doesn't mean a disclosure provided by the seller but the disclosures provided by the association or their CAM.  A good agent would have gotten the disclosures for you, an average agent would have given you the contact details to get the information yourself.  It also means you should not have submitted an offer until you had these documents and of course have read them.

You would have also received and Addendum to the Contract - Comprehensive Rider To The Residential Contract For Sale And Purchase - Part A of the disclosure states: IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY THE BUYER BY DELIVERING TO THE SELLER OR SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST.  ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT.  BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING. 

Finally, the title company would have provided a Settlement Statement (formerly known as a HUD Statement) at least 3 days prior to closing, line 104 shows the HOA assessments including the period being charged and the amount. A good agent would have gone through this and picked up the HOA discrepancy, double checked it with the title company, the Association or their CAM and advised you accordingly. They would have also asked for a corrected HOA disclosure from the seller prior to closing.

Hope this helps.