Who is responsible for undisclosed HOA debt?

Question: After we bought our home in Chandler, we attended the homeowners’ association (“HOA”) annual meeting. At this HOA annual meeting we learned that our HOA was in debt for $62,000.00 for attorney’s fees incurred because of a prior lawsuit with our landscaping company. The result is that a portion of our monthly HOA dues goes to pay back this $62,000.00 debt which is of no benefit to us. There is nothing in the HOA Addendum or in our purchase contract regarding this $62,000.00 debt. The seller has denied knowing anything about this $62,000.00 debt. Why should we have to pay back this $62,000.00 debt with part of our HOA dues when we just moved into the neighborhood?

Answer: The HOA debt of $62,000.00 should have been disclosed to you by the seller, but only if you can prove that the seller had knowledge of this $62,000.00 debt.

Note: The HOA Addendum, lines 63-66, required financial information from the HOA that should have disclosed this $62,000.00 debt. If you did not receive this information, you may have a claim against the HOA.

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