I bought a bank owned foreclosure through a VA loan and was specifically told repeatedly by my realtor that there was no homeowner's association. I even asked the seller (bank representative) and the lawyer during closing if there was one. I was told no. I believe the contract stated no HOA and the HUD-1 settlement statement reads "N/A" in response to the "OA Dues" section J # 108. However the contract does say "exempt" from property disclosure "see guidelines". The title search revealed restrictive covenants but they were not produced at closing. I would never have purchased the house if I had known about any HOA. That was one of the stipulations on any home that I viewed. The rules associated with my HOA will affect my lifestyle not to mention the fees will be an unanticipated expense.
I want to know if there is any way out of the stipulations of the HOA, and if I have any grounds to pursue legal action against the bank for not telling me that there was an association.
Unfortunately, there is no basis to avoid the rules of the HOA.
As for a lawsuit,, this will be difficult. In situations like yours, when a person has a very specific requirement that they are demanding, the law requires you to act reasonable with ensuring that requirement. Relying on the opinion of "experts" is sometimes good enough. The key will be when you got the title search. If you got the title search at or before the closing, you will have a difficult time as the law will say you should have asked about it and got more information.
Further, the restrictive covenants are a matter of public record and were part of your chain of title . If you want to discuss your chances of a lawsuit (it would be against whomever you hired and weren't honest with you...the bank had no duty to tell you of the HOA...if it even knew there was one), you should speak to a civil litigation attorney in your area.
To answer your question we have to address your rights against each individual party; the seller, your Realtor, if you had one, the listing agent, if there was one, and your attorney. The seller is exempt from disclosure requirements but cannot affirmative misrepresent material facts. In most situations the seller acts through an agent, the listing agent, who lists the property on the MLS and this listing will show whether there are HOA dues or not. If the listing does not show HOA dues then this is a misrepresentation which then turns the analysis to whether you or your agent should have found out about the HOA by using reasonable diligence. This is a buyer beware state but if you a a Realtor if your own then the burden would shift to him or her to find out about the HOA on your behalf. Not doing so would constitute negligence in my opinion. If you did not have a Realtor of your own then the analysis turns to what you should have known or could have known by a reasonable investigation. If you did not actually ask then it is a difficult case. If you were asked and were lied to or were misled into not conducting an investigation then you may have a case against the listing agent (who put the information out there). If the seller documents did in fact say "no HOA" then that might be actionable - but the case is easier against agents then sellers. The last analysis turns on your attorney who has a duty to determine any matters that affect the title and insurance you against them. In order to put together a HUD then he or she should have sent the seller/agent a form requesting that they disclose whether an HOA exists - you need to see if this was done by your attorney. If not, your attorney may have failed to properly check the title and you would file a title claim. In summation 1) call your title insurance company to make a claim 2) look at the contract to see what the seller actually disclosed 3) look at the MLS listing to see what the agent disclosed 4) talk to your own agent, if applicable. 5) make claims through the Real Estate Commission against the agents responsible if they misrepresented or failed to find out about this.
