Legal Question in Real Estate Law in California
Seller failed to disclose huge HOA assessment
We purchased a condo in CA, went into contract in late August, and closed on Sept. 20th. When we moved in on Sept. 22nd the seller had left a document on the counter for painting the 4 unit complex (totalling almost $20,000). In his initial disclosures he said the HOA was contemplating painting the complex in spring 2008 but didn't give estimates or keep us updated - however, we just found out that they decided to do this in October of 2007 instead. We have the document showing that the bids were received on July 30, 2007 and minutes showing the decision was made well before closing and that the seller waived his vote and didn't contact us to take part. Do we have any recourse on the seller for non-disclosure? The documents were not in the disclosure packet so we didn't sign them - isn't that the same thing as proof that we didn't have knowledge of this assessment and the seller did? Can we take him to small claims court? Any advice would be appreciated. Thanks.
2 Answers from Attorneys
Re: Seller failed to disclose huge HOA assessment
yes, the seller had to disclose this cost as it was a potential lien against the unit if not paid. You can only recover up to $7,500 in Small Claims Court, but the problem is do you really have damages? The painting of the complex will be to your benefit and unless you can show the price fro paintin g ishigher than it should be, how have you sufered? You might be able to rescind the contract and get your money back, as he failed to disclose to you that the effective price of the condo was going up $20,000 [especially if it did not appear that repainting was needed]. Also, the HOA probably should have warned you and the seller's real estate agent might also have liability for not making sure the disclosures were accurate as the agent could have gone to the HOA and seen that a contract for repainting had been signed.
So if you still want to live their, i would do the following: a) find out if the price for painting is excessive and take your figures and info to the HOA, b) notify the seller and his agent, and yours, about the situation and that they need to compensate you as you would not have bought the unit had you known of what was going to occur, c) sue the agent and seller [add the HOA if you do not mind they will hate you and 1/4 of any award against the HOA will eventually be picked up by you in higher assessments] so the limit is $15,000 and have your spouse also sue to try to dump the limit to $30,000
Re: Seller failed to disclose huge HOA assessment
Follow Mr. Shers advice. Small claims court like he stated is limited to $7500.00 in damages.
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