My HOA fined me $15K for a mistake made by my home’s previous owners – I found a loophole that meant I didn’t have to pay

A NEW homeowner was left in disbelief after his first mortgage payment came along with a $15,000 homeowners association bill.

Christy Bieber purchased her first home, which was also located within an HOA.

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She agreed with this fact and noted that she was excited to be a first-time homeowner, as she shared in her blog post. The climb.

In order to pay for his house, Beiber took out a mortgage that he intended to pay monthly.

Shortly after paying her first mortgage bill, the new homeowner received a $15,000 fee from her homeowners association.

“Obviously this was very upsetting to me as it is a huge amount of money,” she wrote.

According to Bieber, the fine was in relation to the previous owners, who the HOA alleged were negligent in maintaining their properties.

The HOA claimed that the previous owners were notified that there were plants that needed to be revived or replaced and paint needed for maintenance.

When the HOA notified the previous owners, their failure to comply cost them $100 for each day the problem was not resolved, with a maximum of $15,000 in fees.

Evidently, the previous owners reached that maximum and the HOA sent the bill to Beiber.

She contacted her association to explain the circumstances, that she was the new owner without knowledge of the violations.

In rebuttal, her HOA said it didn’t matter who owned the house as the fees were on the house and transferred to the new property.

Normally, Beiber noted, the HOA would be correct because its state law dictates that HOA fees be assigned to the property and not the home owners.

But, with her home buying knowledge, the new owner took the necessary steps to avoid having to take on this debt.

AVOIDING A $15,000 FEE

When she purchased the house, she had the HOA sign an estoppel, which is a document that lists all debts tied to the house being sold; the $15,000 was not listed.

“The law in my state, and most states, says that buyers and sellers can rely on good faith estoppel and the association cannot charge any fines or fees not listed there,” Beiber explained.

According to Beiber, the fines were applied in the period after the signing of the estoppel and before the house was closed.

That timing meant she wasn’t responsible for the thousands of dollars in fines.

Beiber also noted that she has a law degree and used it to do research and save a lot of costs.

“If that hadn’t been the case, I could have hired a lawyer to help me — or I could have assumed I would have to pay and lose a lot of money,” she wrote.

Now, having weathered the fees debacle and come out the other side unscathed, she’s warning other first-time buyers to do their due diligence to protect themselves.

“If you are buying a home in an HOA neighborhood, you should be aware that this could happen to you,” she warned.

“If your association has the ability to collect fines and imposes them on former owners, you could become responsible for the costs if they are not paid in full at closing.”

Of course, there is a surefire way to not end up in the mess Beiber made, as she noted at the end of her post.

“Alternatively, you could just no buy a home in an HOA neighborhood – which my story may convince you is your best bet,” the triumphant homeowner wrote.

What is an HOA?

One in five Americans lives in an area with a Home Owners Association – or HOA. But what exactly do they do?

• An HOA is a homeowners association – an organization that aims to maintain a clean, cohesive place for its residents to live.
• Entire neighborhoods, subdivisions, condominiums, single-family homes or townhomes within “a planned development” will often constitute an HOA.
• They also serve as a regulatory body for the tenants, who manage and finance the HOA through monthly fees.
• Its main goals are to keep the community functional and visually appealing and maintain property values.
• They focus primarily on a neighborhood’s common areas, like roads, parks, and pools — but they can also stipulate what residents can do with their properties, like yards and sidewalks.
• These restrictions often impose uniformity on properties, for example, ensuring that most houses look the same and that all sidewalks are free of weeds.
• An HOA Rule Book of Covenants, Conditions, and Restrictions (CC&R) is distributed to all residents, and an elected volunteer board of directors enforces these regulations.
• Violating these rules can result in penalties such as fines and even litigation – as most HOAs are incorporated and subject to state law.
• HOAs are often the subject of controversy, with some members feeling that the rules are too punitive and restrictive, or that the leadership has too much power.
• But other HOAs like this give communities the power of self-government and can ensure a degree of harmony among residents.