Attorneys in the house?

[LouisEly]

Wonder if there are any attorneys here who have worked in real estate law, or more specifically, HOA disputes between fellow owners.

 

Per some posts I previously made, there appears to be a roof leak and I am the top unit of a 4-unit building. I've had water come through in three different places in the last six months now, it's been dripping in one place since 7/1, and I now have several large cracks in my ceiling that are getting larger and the ceiling appears to be sagging.

 

I made them aware of the leak back on 7/1. Took a while to get contractors in here who would actually send an estimate, and I got and shared an estimate with them on 7/24. After a week and additional requests from me they said they were good with it, but we don't have the funds in the reserve to put 50% down. When I submitted a request for a special assessment due mid-August, they all quickly rejected that - one owner is selling and closing on 8/20 and doesn't want to deal with it (said they will include funds in escrow for their share of repairs), one is a newer owner who said she wasn't expecting this and doesn't have the money, and the third just pushed back and said we haven't agreed on dates.

 

Are there laws as to a time frame when known defects have to be repaired? As a HOA, are there requirements to provide funds for repairs within a certain time? I'm most concerned about the cracks, as waiting until after 8/20 to get funds means another month with a bucket in my living room and another month under ceiling cracks that are getting larger. All roofing companies I've ever dealt with want 50% up front, balance upon completion, so we can't do the work now and bill later.

 

Any legal advice would be greatly appreciated.

[chuckiehacks]

Not an attorney, but I'm on the board of my HOA and we've had to retain an attorney in the past when dealing with tenant issues. If you're in Milwaukee, I would recommend her.

 

https://www.huschblackwell.com/professionals/lydia-chartre

[BrewersSuperCollector]

"(said they will include funds in escrow for their share of repairs"

 

I wouldn't believe that for a second.

[BrewersSuperCollector]

"(said they will include funds in escrow for their share of repairs"

 

I wouldn't believe that for a second.

[MrTPlush]

"(said they will include funds in escrow for their share of repairs"

 

I wouldn't believe that for a second.

 

Yup! And when he finds out they don’t...too late.

 

That is why they said it.

[xisxisxis]

"(said they will include funds in escrow for their share of repairs"

 

I wouldn't believe that for a second.

 

Yup! And when he finds out they don’t...too late.

 

That is why they said it.

 

I would contact the Real Estate Agents (buyer and seller) and make them aware of the situation (officially) and provide them with the quote for the repairs. If they don't pass it along to the escrow company they will be liable for any damages and Real Estate companies have "deep" pockets so they will jump to make sure the money is in escrow. The buyers agent will be all over this...

 

Louis, I would recommend getting a quote for the plaster/ceiling repair as it currently stands and a worse case scenario if the damage spreads... Pass that to the HOA and let them decide on whether they want to cover the additional expense by letting the repairs go.

 

It's too late, but an HOA that doesn't have reserves for a roof repair is pretty scary as that means it is WAY under funded. It sounds like there may be a fairly high turnover rate for the units so many owners don't want a high monthly fee to create a decent reserve. You can also suggest to other owners that their property value will be affected if potential buyers learn of the underfunding of the HOA.

 

Edit: Escrow companies are super conservative. They will likely hold 2-3 times the repair cost, maybe more, in escrow to cover the repairs in case the costs escalate so don't be afraid to get involved with making sure the agents know about the situation as things get exponentially more complicated if the sale goes through and there's no money in escrow... the costs will escalate as multiple parties will get lawyers...

[LouisEly]

Dave, I appreciate the advice, particularly about escrow companies. The problems are:

 

1) We are the HOA - it's a four unit building, self-managed.

2) One of the listing agents is the owner of the unit that is selling right now

3) The ground floor unit (not the one for sale) is rented out - that owner always resists to spending money on anything. I met the tenants the day I moved in and the wife said to me, "NOTHING gets done around here."

4) We had a special assessment last year for some other repairs - I pleaded with the other owners about putting in extra funds to build up reserves, but the other owners declined and only wanted to put in the minimum to cover the repairs. The ground floor owner, obviously, because he rents out the unit, but the 2nd and 3rd floor owners have now both sold in the last 4 months so I think they didn't want to put in extra because they knew they were going to sell soon. Three of the four units will now have turned over in the last 14 months.

 

My agent works for the same company as the listing agents though, so I'll notify her and see if she can find out who the buyer and/or escrow company is.

 

The sad thing is, if I had known these units were coming up for sale I could have sold my rental property and bought both of them. Then I'd have ~72% control of the building and could do whatever I wanted.