Q: Is an HOA liable for known misrepresentations made by a home developer, on HOA controlled property?
If the HOA knew of the misrepresentations, intentional fraud, right? If they didn't know, negligence fraud, right? And any related parties aware and benefiting from said misrepresentations are conspirators, no?
A: Generally, no, but that answer could change depending on the misrepresentations. If any of the misrepresentations conflict with the language in the HOA documents, which are public record, the HOA would not be liable because owners are deemed to have read the HOA documents whether they actually read them or not. You will need to consult with a HOA attorney of your own to present the facts. The hurdle would be proving the HOA knew or should have known about the misrepresentations. The HOA is controlled by the developer and once turnover occurs the control is given to the membership to elect the board of directors. The courts recognize the membership controlled board of directors had no way of controlling what developer controlled board members did or did not do in exercising their duties. The board members appointed by the developer are generally the developer's employees.
Charles M. Baron agrees with this answer
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