Q: if HOA filed suit against real estate agency can it affect home owners in community
HOA sold a lot of property for 140,000 to real estate agency. The owner of the agency was HOA president. Agency then sold for 1.3 million. President didn’t have approval of all HOA. HOA is now suing. Can this affect homeowners that have just moved in? Suit was not disclosed. HOA is saying it could bankrupt neighborhood. It’s a 55 and over. They own a quad and piece of property on quad only.
A:
It's not at all clear what you mean by " It’s a 55 and over. They own a quad and piece of property on quad only. ", but in any case the liability of the owners for the costs, plaintiff's attorney fees, defendant's attorney fees, etc. (if that's what you mean) would be limited (on other words, no individual liability) if the HOA is incorporated.
if the "HOA is saying it could bankrupt neighborhood", a HOA meeting should be called and details behind this statement should be demanded. One thing you should ask to see is the fee agreement for the HOA's attorney or attorneys.
A: It sounds like the president did something illegal via some inside deal selling HOA property for 1/10th of what it was worth so she could profit from it. The legal fees are the responsibility of the HOA, which could be substantial but if the president acted outside her powers then the HOA is not liable for that act.
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