Did homeowner make costly mistake at closing? Lien and lawsuit followed

Live in a home governed by a condominium, co-op or homeowner's association? Have questions about what they can and cannot do?  Ryan Poliakoff , an attorney and author based in Boca Raton,  has answers.

Question:At my closing, there was a letter from the association that wasn't provided. Two fees weren't paid, and also the association didn't get a copy of my title. I didn't know we had a management company until I received a letter from them about these unpaid fees.

I immediately disputed them because I didn't know about the transfer fee and the one month's worth of association dues, because the letter wasn't presented at closing. This is technically a violation, and our bylaws provide that we are entitled to a hearing before fines can be levied. What's more, the association's lawyer even wrote an article stating they must provide a hearing for their fines to be enforceable.

They ignored numerous requests for a meeting and subsequently placed a lien on my home. My choices were to pay off the lien or sue, and I made the mistake of suing. Am I right that they were obligated to provide a hearing before placing the lien on my property?  Signed, G.R.

Dear G.R.,

Unfortunately, you are mixing a lot of unrelated concepts, and I think it has gotten you into some trouble.

I am surprised that you found an attorney to sue the association in these circumstances — I wonder if it's something that you just did on your own, and if so, I suggest that you immediately hire an attorney to discuss your options.

A unit/lot owner or their designee has a right to request a document called an "estoppel letter" upon request. There is a fee for this document, and it provides certain critical information, including a list of any monies owed to the association and any other monies scheduled to become due. It must also include any capital contribution or transfer fees. The person to whom the estoppel letter is issued is entitled to rely upon it for 30 days.

You say in your letter that "there was a letter from the association that wasn't provided." I also got the impression that you may have purchased your unit with another buyer, and perhaps it was that person who didn't share the letter. In any event though, as far as the association is concerned, either an estoppel letter was requested or it wasn't, and either it was issued, or it wasn't. 

If it was requested and issued, and it simply wasn't shared with you, that's not the association's problem. If it was never requested, that's also not the association's problem. The only way they would have liability is if you requested an estoppel letter and they failed to issue it, or they issued it without mentioning the transfer fee or capital contribution (the "one month's worth of association dues" is certainly a capital contribution due upon transfer). In that rare circumstance, you likely can defend against foreclosure.

With that said, neither of these fees are "fines," and neither of them trigger the association's fining procedure.

The association was not obligated to conduct a violations committee hearing before imposing the transfer fee or capital contribution against you. You were simply obligated to pay those fees (although the transfer fee is typically paid before an application is even processed — not sure why that wasn't the case here). Instead, this was just you failing to pay amounts due from new owners, and so you are delinquent — and the association was probably correct in filing a lien on your lot if it sent the required Notice of Late Assessment and Intent to Lien/Intent to Foreclose letters.

That's not to say the situation is entirely hopeless for you, as there may be small procedural things the association missed (or it could be that the association is not properly authorized to collect the transfer fee or capital contribution).

But this is likely far too difficult for you to evaluate as a layperson, and the stakes are too high to do this alone. If I am correct that you bought this lot with a partner then that person is equally liable for these costs, so I presume you are coordinating with them.

In any event, it's time to get professional help. If you did hire an attorney to file the lawsuit it could be there are facts I am confusing, or about which I am unaware, and you should follow their advice. But, if your attorney is not experienced in community association law and does not understand how estoppel letters, transfer fees and capital contribution fees work, that's a major problem, and I'd get a second opinion.

Ryan Poliakoff, a partner at Poliakoff Backer, LLP, is a Board Certified specialist in condominium and planned development law. This column is dedicated to the memory of Gary Poliakoff. Ryan Poliakoff and Gary Poliakoff are co-authors of "New Neighborhoods — The Consumer's Guide to Condominium, Co-Op and HOA Living." Email your questions to  condocolumn@gmail.com . Please be sure to include your location.

This article originally appeared on Palm Beach Post: Did homeowner make costly mistake at closing? Legal expert weighs in