Legal Question in Real Estate Law in California

Can the �HOA� demand back dues from a new owner?
My brother and I are purchasing a 1 BR condo in Palm Springs, CA.,
as joint tenants, in which 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 and the HOA (rather than go the route of suing the former owner for these dues) has decided to take the easy way out and demand the $4,000+ back dues to be paid by the new owner.
Is this legal or even conceivable? It would seem that the HOA has a legal team able to get a judgment or, otherwise, collect these dues without the extreme burden of a new owner being obligated to pay them.
If they are within their rights and can demand these back dues from the new owner, prior to closing escrow, what can I do to prevent this from happening?
Further, I am a disabled individual currently living in a HUD-subsidized housing environment. Can HUD �step up to the plate� in this unethical situation?
PLEASE HELP!!!

Asked on 9/06/10, 9:30 am

2 Answers from Attorneys

David Gibbs The Gibbs Law Firm, APC

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First, understand that it is not unethical for them to demand the HOA dues from the new buyer. It is very likely that they have a lien against the unit for the unpaid dues (one of the first steps they generally take in collecting past-due HOA dues), and as such, it must be paid off just like any other mortgage or encumbrance on the property. You need to review your preliminary title report to determine if there is a lien for the dues. If there is a lien, you must either pay them, or cancel the purchase agreement within the timeframes provided for therein. You may be able to negotiate with the HOA, but understand that with a lien, they have the absolute right to demand full repayment.

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Answered on 9/13/10, 9:34 am

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