Q: I received a document saying my condo’s hoa lost lawsuit and the settlement will be around $5M. Will I have to pay?
I co owned this condo with my ex wife. Need to transfer the loan/deed to me. Need to know if I have any financial risk of owing a large amount of money to cover the HOA’s lawsuit lost once I transfer the condo’s deed/loan to myself. The HOA’s lawyer seemed to say the HOA’s insurance won’t cover it
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A: It sounds like each condo owner is now a judgment debtor. Contact your own insurance company after finding out what the suit was for, and what the judgment is. Also hire a TX attorney for advice about exemption rights such as a homestead, if possible.
A: It seems likely that the HOA will have to make a special assessment on the owners to satisfy the judgment or will have to dip deeply into its reserves and raise the members' regular assessments to replenish the reserves. That may render certain types of financing (like FHA loans) unavailable for prospective purchasers until the reserves are replenished. That may temporarily reduce the pool of prospective buyers lowering the price should you decide to sell it. Alternatively, the HOA may defer certain maintenance and repair items, which could also reduce the value of your unit.
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