Excessive Document Fees Lawsuit Investigation
Were you charged inflated fees, or what would be considered more than a reasonable fee by your homeowner’s association (HOA), Co-Op board, or their third-party services, for disclosure documents?
The cost incurred by a HOA or third-party services to provide these documents is usually nominal, especially when provided electronically. It has been reported that some owners have been charged hundreds of dollars, with reports from $370 – $1,250, not including additional service or rush fees. These fees are usually paid under duress by the seller, as these documents must be delivered within a certain number of days or the property transaction will be at risk of delay or failed sale.
What Is This Lawsuit Investigation About?
Statutorily mandated certification documents commonly referred to as “disclosure documents”, are legal documents that are assembled and disseminated by the homeowner’s association.
The documents contain important information such as:
- Financial information such as budget and reserves
- Insurance information
- Unit occupancy limitations
- Rules and regulations; bylaws
- HOA fees
- Assessment disclosures
- Property lawsuit or judgment information
This information must be provided to the potential buyer as mandated by state law and per the terms of the purchase and sale agreement. The actual cost of providing these documents is nominal in most cases, as the documents are usually provided via PDF’s over email, or sometimes become available immediately through a link provided after the seller pays an online fee that could be in the hundreds of dollars.
Investigating Claims of Unjust Enrichment, Fraud, and Deceptive Business Practices
As HOA’s are fiduciaries of its members, they are legally entrusted with the duty of care, loyalty, and to act within the scope of authority. They are not to benefit unfairly at the expense of their members and the same rules apply to their agents or sub-agents.
“How is it legal for a for-profit management company to resell documents that belong to unit owners in a not-for-profit condo association? The money is not going to the condo association. It’s paid to the management company or third-party provider, entities that do not own the documents,” said one condo owner and president of a real estate data analytics firm.
WE ARE STANDING BY 24/7, WAITING TO ASSIST.
Sanders Phillips Grossman is working with the law firm Milberg LLP investigating claims of potentially unjust enrichment, violations of state Condominium Property Acts, fraud, and deceptive business practices by HOA’s and their agents or sub-agents in the transmission of disclosure documents.
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