Are we liable for back taxes owed by our HOA?

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Latest post 07-05-2009 5:15 PM by M Read. 3 replies.
  • 07-04-2009 11:58 AM

    • CarrieG
    • Not Ranked
    • Joined on 07-04-2009
    • WA
    • Posts 1

    Are we liable for back taxes owed by our HOA?

    We purchased our house in February of this year and are part of a homeowner's association that includes a golf course and club house. A couple months ago through the community newsletter we learned of back taxes owed by the assocation from 2005-2008, mainly due to an obscure tax law about the golf course. Now we are being told that the board has voted to charge everyone in the community equally to pay the back taxes (roughly $250). Are we liable for these taxes even though we were not homeowners then?

  • 07-04-2009 12:05 PM In reply to

    Re: Are we liable for back taxes owed by our HOA?

    Yes.

    It's an assessment.

    It's addressed in your CC&Rs and by-laws. Have you read them?

    That's what you get when you buy into an HOA.

    • The right of the people 
    • to keep and bear arms,
    • shall not be infringed.
  • 07-05-2009 4:40 PM In reply to

    Attached to the property . . .

    The obligations of being in an HOA normally attach to the property, not the owners.  If you buy a property, you are buying the obligations also.

    A buyer has an obligation to investigate if they are going to buy into an HOA.  I don't really know how you would have found this little problem, but the documents governing the HOA normally exist to protect the HOA, NOT the owners.

    Nothing stops you from contacting your seller, however, and trying to claim this from them.  You likely don't have any LEGAL basis to force them to pay, but they might pay to make you go away.

  • 07-05-2009 5:15 PM In reply to

    • M Read
    • Top 500 Contributor
    • Joined on 02-28-2009
    • AZ
    • Posts 55

    Re: Are we liable for back taxes owed by our HOA?

    If you learned of this a few months ago, (just after closing on your unit) it is likely that the BOD knew of it as you were preparing to purchase. If they knew of it, MAYBE the people you bought it from knew it, too. If you can prove they did, or should have known, via minutes of board meetings, fliers, notices, etc, and did not disclose that, you may be able to take them to small claims court for nondisclosure. If the board knew it then and it was not disclosed in the financial information that should have been given you, you may have a way out. There may be some other things to consider, too. I wonder if this TAX DEBT is something a title co should have been able to determine? If so, perhaps your title co should pay it.

    The yahoo group AZ-CHORE (a homeowners group) may be able to give you some direction.

    I take it that $250 is each person, not a total for everybody, right? I guess that what you would do would at least in part be determined by how hard you want to fight this, and what consequences you might be willing to suffer whether you win or lose.

    You would have to carefully read all your documents as well as applicable state law, and ALL financial information from that period, including board meeting minutes. IF the BOD knew of it at that time, you may be able to fight it if you want to go to that expense in money, time, grief. You should be able to get all the financial information from the management company, but, to keep your low profile, you may be able to get the year end/fiscal reports from people that have lived there longer. Some people keep that stuff, but maybe not a lot. If you can get even what the BOD sends out to all members, that may give you some information without sending up signals to them you are studying the matter.

    It IS possible the board did not know of this until recently, and therefore all owners are on the hook.

    What RESERVE FUNDS does you association have available, how much money is in the SLUSH FUND? Reserve funds are generally collected and set aside for common area repair/replacement and maintenance ofmajor items, reather than monthly ongoing maintenance, so that money MAY NOT be available for this kind of use. But it may be, it depends on what your docs and state law say.

    SOME hoas keep a slush fund. It's probably not big enough to cover this tax if it's 250 on each ho, but if it's 250 total, it might be, and you can ask the board to consider using it instead. The slush fund might be large enough to reduce that 250 each, also.

    Be aware that the people on boards are often control freaks that do not like to have thier authority challenged, and often selectively punish those who go against them.

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