K.L. from Onslow County, North Carolina writes:
Dear Mister Condo,
Can I sue my HOA for lost money on a condo sale because they prematurely published an engineering report to owners detailing possible exterior wall work? The treasurer ballparked possible special assessment costs which were unconfirmed-material fact must be disclosed-however the work was not voted on, no spec. assmt. was ever confirmed, other remedies and costs are still being investigated 5 months post sale and so far, nothing further has happened. I lost full ask offers and took a $40k reduction to sell because this report got around the real estate community and was used by buyer’s agents to lower seller’s prices. Do I have any legal right to sue the HOA for the lost monies I had to forfeit because they stigmatized the property by prematurely disseminating a partial, incomplete and unconfirmed report that may very well change and never be implemented? I feel cheated out my full ask offers which disappeared as soon as potential buyers saw this report. The drama of this situation caused undue stress and costs for me. Thank you….
Mister Condo replies:
K.L., I am sorry for your predicament. As you may know, I am not an attorney and offer no legal advice in this column. If you wish to pursue a lawsuit, you should speak with a locally qualified attorney to determine if you have a case. In this litigious world in which we live, anyone can sue anyone else for whatever reason they choose. You are no exception and you certainly have the right to sue your association. However, I do not believe you will prevail because I don’t see where they did anything that might rise to liability that caused your buyer to back out of their purchase agreement. In the course of managing the association’s assets, a defect that needed to be remedied was found. It would appear that inadequate reserves had been collected to cover the proposed cost of repair and a Special Assessment might be needed. This is a common occurrence in condominium associations. I am not exactly sure how the information was entered into the Minutes of the association but you are right that a potential buyer has a right to know about any Special Assessments that are looming on the horizon. Failure to disclose such an assessment could cause a lawsuit from the new buyer against you and/or the association for failure to disclose. If you feel they violated your rights as a selling owner, you should speak with an attorney. All the best!