Can the “HOA” demand back dues from a new owner?
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Can the “HOA” demand back dues from a new owner?
My brother and I are purchasing a 1 BR condo, as joint tenants. I plan on living in or, perhaps, renting out. Our offer has been submitted, presented to the listing agent and bank, and FHA loan financing has been approved. We are awaiting the opening of escrow in the very near future. I am perplexed, as well as annoyed and confused, as to the legality of the HOA’s position that the new owner(s) will be required to pay an excessive amount of back HOA dues incurred and in arrears by the former owner. The bank refuses to pay these back dues.
Asked on September 6, 2010 under Real Estate Law, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
As well they should. I assume that the HOA is looking at it as a debt on the property itself that comes with the property. Lien's on property are generally paid by the seller at closing. The monies are put in to an escrow account if need be if the matter can not be resolved at the closing. But the debt was not incurred by you. It would seem against public policy and unconscionable to transfer the loss to the new owner simply because they are purchasing the unit. It is the obligation of the HOA to go after the former owner for the debt owed, not for you to have to do it. I would have your attorney look in to the matter more fully and read every piece of paper that comes from them in the purchase. Good luck.
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