Q: I purchased a home in Homestead, Fla. The disclosure form given to me with the purchase has only two homeowners associations listed. Now the homeowners association wants me to pay for a third one. Do I have to pay for the third one?

A: Recently, there has been a flood of letters from readers on this issue. Let’s start with a little history on homeowners associations.

For condominium developments and other groupings of housing, legal experts devised ways of insuring that there would be certain rules in place to govern the way people lived in a particular community. That community can be a high rise condominium building, golf course development, ski resort or even a townhome development. Communities can be as small as two units and as large as several thousand units.

In some cases, buildings within larger communities can have their own association and that association in turn can be a part of a larger association and that larger association can be part of a larger master association.

Therefore, a single homeowner buying in a development may end up being a part of one or two or more homeowners associations.

To get things started, legal documentation has to be written to create the various associations.

Generally, buyers coming to a closing for the purchase of a home will first obtain information from real estate agents that will tell them whether the home is part of an association and what the fees are associated with owning in that development.

That agent may be familiar with the development or may obtain information about the associations from the seller, to then give to prospective buyers. Sometimes, documentation is provided by the community for sellers to give to prospective buyers.

If the buyer doesn’t see any documentation about associations at the time he or she walks through the house, it may wind up as part of the disclosure form or the contract to purchase the home. In some parts of the country, association fees and the like are disclosed in the seller disclosure form. Some purchase contracts allow the seller to write in the association fees.

Disclosure about homeowners association fees may also turn up in the title report, title abstract or title insurance commitment. (Be sure to purchase an owner’s title insurance policy, whether or not your lender obtains title insurance. This will protect your interest in the property.)

So if you’ve owned the home for awhile, and are just finding out about a homeowners association, the system somehow broke down. Go back and look at the listing sheet, your purchase agreement, and the title insurance commitment from the closing to see if there was any mention of the association that has just billed you for fees.

If the title report was done properly and it shows only two associations, you will need to find out what right the third association claims to bill you fees. It may be that the third association was set up to request payments for something you are not required to pay. If the association has no legal right to collect assessments, you probably have no legal duty to pay them.

Now, if you are being required to make an additional payment to one of the two associations that you knew about, that payment may be a special assessment payment.

Frequently, associations need more money. They bill the usual monthly assessments but if there is an extraordinary expense, like new plantings, a new roof or a costly repair, that monthly sum won’t be enough. So, the association board passes a "special assessment" to cover the new cost. You can look up the board meeting minutes to see if a special assessment has been passed.

If the special assessment was passed before you signed the contract to buy the home, you should have found out about it. If you didn’t, something went wrong. Either your agent, the sellers (though their seller disclosure form), the contract, your attorney, or the association should have disclosed the special assessment.

If you live in a state where they do not use attorneys to close house deals, you might have had the obligation to find out about these fees yourself.

If the special assessment was passed after you closed on the property, you might be stuck having to pay the special assessment.

Here’s what we usually tell buyers: If you’re buying a home that is part of a homeowners association, go to the office of the association, review the budget of the association to make sure they are not spending more money than they are taking in, review the minutes of board meeting for up to a year to see what’s going on and get a disclosure statement from the association telling you what the current assessments are and whether there are any plans for special projects during the next year or two and whether a special assessment is contemplated in that time.


Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 100 Questions Every First-Time Home Buyer Should Ask. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com. © 2008 by Ilyce R. Glink and Samuel J. Tamkin. Distributed by Tribune Media Services.