Can I sue my Lawyer / Seller's Agent - Posted by Jessica Fletcher

Real Estate Investing Real Estate Law
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Posted by domineaux_Houston_TX on September 28, 2005 at 19:16:40:

My gosh…

Contact the board members for the POA and give’m what they want. Explain your failure was not intentional and you want to fully cooperate. They’ll probably waive the $800 fee.

If you go at them full bore, you’ll just get to spend your $800 and start off - as an adversary.

If the condo is the kind of place you want to live, you’re probably the kind of person they want to live there.

Remember Condominiums are individually owned units. Everyone cooperates to keep good property values. If you owned a unit you’d strongly favor the restrictions.

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Can I sue my Lawyer / Seller’s Agent - Posted by Jessica Fletcher

Posted by Jessica Fletcher on September 26, 2005 at 11:49:51:

I bought a condo as a rental property but didn’t know it was part of a condo association. I have already signed a lease and have a couple living there. I have since received an $800 fee from the Association saying I needed prior approval before renting. (They still haven’t approved the new lease.)

I recently discovered Illinois has a “Illinois Condo Property Act” which states that at closing the Seller’s Agent must fully disclose all information about a condo association and allow me to read over their bylaws and CCRs. It also states that I would have had 5 days to back out of the deal if I didn’t agree to Assoc. terms and NOT lose my deposit.

I was never given any condo bylaws. Everyone at that table knew I intended on renting. Can I sue my lawyer (who is a real estate lawyer) for not representing my rights and the seller’s agent for nondisclosure? If I had known about the association I would never have bought the place.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Frank Chin

Posted by Frank Chin on September 29, 2005 at 07:58:27:

Jessica:

You have some good advice already.

Concentrate on going forward and see if you can work something out with the HOA. I own a condo for rental, and for condo complexes to be viable, they have to control the number of NON owner units, by keeping them to a minimum.

I rented my unit to a responsible tenant, but it happen that the one next to mine is also a rental unit. It was rented to 2 college students who have loud parties, and my tenant threatened to move a few times. I had to write the HOA, they in turn wrote to the condo landlord. This went on for months till the students were gone. What I’m trying to say here is a pain for the HOA to control tenants.

In addition, once the percentage of absentee owners go over 50%, new buyers will have problems getting a conventional mortgage, because banks can’t sell the mortgage.

So the HOA is not the bad guy and has an important responsibility to maintain control.

I want to comment now on your not knowing about the HOA, and restrictions on rentals. NEXT time, when you go forward, ASK, ASK ASK plenty of questions, such as what’s different about this investment, and the basics on how it works. When I bought my rental condo:

1- I asked about the restrictions on rentals. I’m told the complex cannot have more than 25% rental units. It has a total of 104 units, and I’m the 18th rental unit. So I’m OK there.

2- Next question is who keeps track of the rentals, and what procedure is needed. The answer is the management company tracks it and the HOA board has to OK the unit as a rental.

3- Next question is what PROOF or paperwork do I have that the board approved the unit for rental. The answer is the best thing to get is a board meeting, and a board resolution approving it.

4- The next thing is I asked my attorney and agent that they can coordinate obtaining the resolution. I’m told me, no problem. they should have it before closing.

5- I went to the closing, and asked if they have the board resolution. The attorney and agent looked at one another, and I knew we have trouble. The wife, who’s a banker says "no board resolution, no closing.

6- Attorney asked me "do you know who the president of the baord is, or better yet, his phone number?? Guess what, I wrote down all important numbers of the top of the folder.

7- Attorney calls, spoke to the wife, and was told the board president is down the street watching the Thansgiving day parade. SO the agent and I went down the parade route, found him, and took him home to write and sign the resolution.

Do you know how important this document is??

Every year or so, the management company calls and say “we don’t have paperwork showing your unit as a rental” We would say “do you have a fax number”??

We fax the board resolution each time and it would shut them up for another year.

What I’m trying to say is, YOU don’t KNOW WHAT YOU DON’t KNOW. Even if you have attorneys, agents, ASK ASK and ASK.

And if I depended on the attorney and agent, I be in DEEP SH** right now.

Always DEPEND ON YOURSELF, and learn HOW to ASK the RIGHT QUESTIONS.

Frank Chin

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by domineaux_Houston_TX

Posted by domineaux_Houston_TX on September 28, 2005 at 10:29:56:

Yes! you can sue anyone for just about anything.

If I were in your shoes

FIRST

I’d appeal to the POA/HOA members. You might be surprised how flexible they can be in cases like yours.

I’d go in with my hat in my hands and bite my tongue before I became abusive.

Contracts are contracts, but the people will be neighbors - taking your heart out certainly won’t be an advantage to them. The might waive the fee as it appears it might not be written in blood.

Don’t feel bad…HOA and POA can creep into real estate purchases from the most unlikely places.

A friend of mine just bought a house in well kept neighborhood of 1,800-2,000 feet homes. The neighborhood was scattered down two city blocks…they had a HOA and all the common areas and every individual home’s lawn was maintained by the HOA. $288.00 per month HOA fee. That’s twice the taxes… LOL

Needless to say it butt… You’ve gotta take care of things before the fact or you’re gonna have a miserable time with investment real estate. You’ll not get much sympathy in the courts for things you should have known as an investor.

SECOND

If you cannot get results with the POA/HOA I’d suggest certified letters to all principals with your grievances and how you’ve been damaged. You’ll be amazed how much credibility and seriousness a certified letter gives your complaint. Most intelligent people with an ounce of savy will respond to you post haste to resolve issues.

THIRD

Consult and attorney (spend your money) and go for the throat.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Natalie-VA

Posted by Natalie-VA on September 28, 2005 at 10:01:33:

Jessica,

If you had an agent representing you, that person should also be on your list. What’s the point of having representation if the agent doesn’t look out for you? Getting a resale package to your client prior to closing is about as basic as it gets.

I would figure out your damages and go after both agents. They should have errors and omission insurance to cover this.

Let us know how this plays out.

–Natalie

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Brian (UT)

Posted by Brian (UT) on September 27, 2005 at 21:07:14:

Jessica

It must have been murder to come up with that alias, so is this condo in cabot cove?

Maybe you should talk to your lawyer about the possibility of recinding the contract, it appears there are grounds.

Brian

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by River City

Posted by River City on September 27, 2005 at 10:18:38:

Don’t all condos have a Homeowner’s Association?

There are usually common grounds in a condo and the association maintains them. Do you pay Homeowner’s Association dues?

You might want to check to see if a copy of the Covenants and Restrictions are in your closing documents. Generally, it is required that copies of these be provided in a sale. If they were provided, this was your notification.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Rita

Posted by Rita on September 26, 2005 at 14:58:19:

I am in a similiar situation but receieved a special assessment for building defects in the amount of $24,000.00 per condo unit. I am in Florida and not familiar with the laws in Illinois. I to did not receive any bylaw etc prior to closing. I had a meeting with my attorney last week and he feels I have a pretty good case against the seller for not disclosing. Good luck keep me posting on your progress.
Rita

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Jessica Fletcher

Posted by Jessica Fletcher on September 29, 2005 at 09:44:33:

Frank,

Great advice! I will make sure I get all the proper paperwork regarding their “OK” on the tenants. I’m not going to count on the management company for keeping track of it all because they have already lost some paperwork and tried to say we never gave it to them. Thankfully I had a receipt of the Priority Mail slip showing it was mailed and (thanks to the USPS website) proof that they DID receive it, what time, and who signed for it. I like all your suggestions.

Thank you

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Jessica Fletcher

Posted by Jessica Fletcher on September 28, 2005 at 11:29:02:

Natalie,

You’re correct. We called her yesterday and she admitted she is partially to blame because she should have insisted on seeing the bylaws and CCRs. (She wasn’t offering to cover the $800 though!)

I’ve really learned a lot. Bascially, even though you pay through the nose for lawyer’s fees and agent’s fees, no one really is representing you. They are all looking out for their paycheck. I’m going to hunt down some good books or audio programs that teach the ins and outs on investment properties. When it comes down to it, we can really only count on ourselves.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Jessica Fletcher

Posted by Jessica Fletcher on September 27, 2005 at 12:07:04:

The Covenants and Restrictions were not in my closing documents. I did search through my closing documents and found a form titled “Condominium Rider” that states I agreed to all bylaws and CCRs - which I foolishly signed - but I never received them. I even called my Realtor and she said we never received them. She said she remembers the Seller’s agent mentioning something about them but he didn’t have them and couldn’t get them.

I’ve already spoken to another lawyer and it looks like the only option I have is to sue my lawyer for Malpractice. He said this was an almost LOSE situation.

As far as your question about all condos having an HOA, you’re probably correct. I’ve always lived in Single Family Homes so I was ignornant to this fact. Live and learn.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by JohnBoy

Posted by JohnBoy on September 27, 2005 at 16:50:43:

You said the Assoc. gave you a $800 bill saying you needed prior approval before renting. What was the $800 fee for? What do they mean by approval prior to renting? Approval of the specific tenant prior to renting to them or approval to just be allowed to rent the property at all?

It would appear to me that you may have a case against the listing agent and the seller and your attorney. Your attorney for malpractice. But more so against the seller and agent. They KNEW your intentions where to buy this for a rental. Which means it can be easily argued they intentionally withheld providing you with any copies of the bylaws and CCR’s. By doing so you may have not purchased the property since your only reason for doing so was for an investment property to hold as a rental. If the assoc. has anything dissallowing rentals you would have not closed on the sale. Sounds like they purposely withheld that to avoid you from backing out.

Have you gotten a copy of the bylaws and CCR’s since? What does it say about renting? What is the $800 fee for? Does it require the Assoc. to approve each renter every time you rent to someone else or does it only require approval to be allowed to rent the property itself?

You may want to get another opinion from another lawyer. Of course you may want to first wait and see what the Assoc. does about you renting the property. They may have failed to disclose and provide you with the bylaws and CCR’s, but at this point, what are your damages? It’s a waste of time and money to sue over just principle. You need to establish damages to make any lawsuit worth pursuing. So if the assoc. allows you to rent then what would your damages be? Now if the assoc. will get involved with having to approve of every renter you ever decide to rent to in the future where they have a say in saying who you can and cannot rent to, then that could be damages on your part. But if it’s just a matter of approving whether you can rent the property or not and they allow you to rent it out, then what would be your damages?

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Jessica Fletcher

Posted by Jessica Fletcher on September 28, 2005 at 11:23:22:

The $800 fee is for not getting prior approval before renting to anyone. You can rent but they have to approve the person. They want credit history, background check, etc. I frankly find this ridiculous. I’m the one paying the monthly fees and the mortgage. What difference should it make to the board what the tenant’s credit history is? I almost think this is a thinly veiled attempt at keeping certain “people” out. That alone has to be illegal.

And how on Earth did we allow HOA/COA to have so much power? The government doesn’t even allow this type of discrimination for renting apartments or selling your house to someone.

In answer to your question, I have not gotten a copy of the bylaws and CCR yet because I was just told yesterday if I want it there is a $50 charge. That’s probably why the Seller’s agent didn’t have a copy. He didn’t want to pay the $50.

I’m uncovering more and more crap everyday.

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Re: Can I sue my Lawyer / Seller’s Agent - Posted by Frank Chin

Posted by Frank Chin on September 30, 2005 at 07:16:42:

Jessica:

By only asking $800.00, they’re being easy on you. I heard of cases where they insist on the owner evicting the tenant, and if the owners already own their own homes, they can’t move there, and wind up having to sell the place, PLUS risking the tenant suing YOU, a much MORE expensive alternative.

As to the powers of the HOA, here in NY state, its been tested in the courts, and with few exceptions, like overt discrimination, the HOA reins absolute. Its even more egregious for COOPS, where the HOA can even turn the BUYER down based on livestyle, which they cannot do in a condo. But they can do so for a tenant. There’s one COOP here in NYC that turned down Richard Nixon because the HOA felt the Secret Service presence would cause noise and invonvenience for the building occupants, not to mention the constant stream of visitors coming all times of the day and night.

Mr. Nixon, who knew better, did not sue.

I also would NEVER invest in a CONDO where they have to approve each of your tenants, and that ONE question I also ask regarding procedures. I’ve been doing rentals in NYC for a number of years, and rented to a number of good tenants because the other apartment they liked better was a condo or coop, and they can’t wait for the owner to get the HOA’s approval. Time is money, and a delay or a day or two can mean the tenant moving in this month, or yet another month.

Good luck to you.

Frank Chin