We Must Stop Duping The Buyers!

guest blog by Nila Ridings

How many people don’t trust used car sales reps? Most everyone. Why? Because they assume they are shysters, liars, and con men. They are the butt of jokes, in comics, late night TV, and any other time when someone is in need of an analogy for a buyer that got ripped off by a seller. Yet, many states have a “Lemon Law” that gives the buyers some protection from a bad car deal.

I bought a pre-owned truck from a guy that was absolutely honest about it. There were no surprises, no hidden damages, and no deception. As a matter of fact, I’ve become friends with his wife and family. They are a really fun and nice family.

I wish I could say the same about real estate agents and home sellers that I’ve done business with. Let’s see, there’s been the one that failed to mention the contractor he hired threw all of the construction debris down the duct work in a two-story house that could have caught on fire. There was the real estate agent that listed a property and didn’t exclude items the tenant owned so it was sold to me with her antique light fixture and automatic garage door as well as her new gas stove in the kitchen. Then there was the couple that said they wanted to move from this townhouse because they wanted “more land.” Truth is: They camouflaged all of his shoddy DIY projects and were running from this horrible HOA!

Finally, we have a lawsuit where a real estate agent is being sued for failure to disclose. Failing to disclose construction defects, assessments, and loans held by the HOA should be automatic loss of a real estate license in my opinion. Yet, there are plenty of HOA condo, townhouse, and home sales taking place where the poor buyer has absolutely no clue what awaits them once the ink on the contract dries. No laws that require disclosure that the HOA is in debt $1,000,000. Nope, that is just a minor unimportant detail. Bull crap!

We may soon arrive at the time when used car sales rep jokes will be replaced with real estate sales rep jokes. Possibly then the legislators will pass another “Lemon Law” that will give homeowners a way out of an HOA nightmare. And buyers that are duped a right to rescind the real estate contract for up to one year. That should bring some honesty into this home buying game! It certainly would level the playing field.

As for me, I’d rather deal with the car salesman than the real estate and HOA industry any day of the week!

(link to story about non-disclosure lawsuit)


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Ward Lucas is a longtime investigative journalist and television news anchor. He has won more than 70 national and regional awards for Excellence in Journalism, Creative Writing and community involvement. His new book, "Neighbors At War: the Creepy Case Against Your Homeowners Association," is now available for purchase. In it, he discusses the American homeowners association movement, from its racist origins, to its transformation into a lucrative money machine for the nation's legal industry. From scams to outright violence to foreclosures and neighborhood collapses across the country, the reader will find this book enormously compelling and a necessary read for every homeowner. Knowledge is self-defense. No homeowner contemplating life in an HOA should neglect reading this book. No HOA board officer should overlook this examination of the pitfalls in HOA management. And no lawyer representing either side in an HOA dispute should gloss over what homeowners are saying or believing about the lawsuit industry.

3 thoughts on “We Must Stop Duping The Buyers!

  1. George K Staropoli

    Good job, Nila! The role of the real estate agent, and the Realtor, must be exposed as part of misrepresentation in the selling process.

    In Arizona, and I assume in other states, the licensed agent is required to treat all parties fairly and to present all information material to the sale of the property. Generally found in Commissioner’s rules that have the same effect as law. Agents are protected by the efforts of the strong special interest lobbyists not to be held responsible for what they do not know, but who doesn’t know about HOAs except the deaf, dumb and blind. Scandalous! Contacting the real estate department in AZ resulted in “We do not regulate HOAs” — na, na , na, na, naaa.

    Agents are required to take courses in agency, contract and real estate law every 2 years. Yet, NAR says you can trust their Realtors to do right.

  2. hoasavers

    Most real estate agents do not know how bad HOAs are, unless they have experienced something bad personally. In AZ there is a small group of us educating our fellow real estate agents…with the hope that the Association of Realtors will come to support us and change in the HOA industry. Unbelievable, but the first step in this education was about the previously unknown fact that the HOA management companies are NOT licensed, and are missing the substantial regulations that they need to have in the law. If us agents in AZ are able to produce changes in HOA law to benefit and protect our clients, then maybe you can exclude them from this post and applaud their efforts. Give us time, the small group is not going to give up.

  3. Nila Ridings

    Thank you, George.

    I have been told over and over again that when selling an HOA property there is no requirement for disclosure about the HOA itself. You must disclose if the basement wall has a crack but not that the HOA has a MILLION DOLLAR LOAN.

    If the buyer does not have the knowledge or curiosity to ask questions about loans, and pending lawsuits, past lawsuits, number of foreclosures and rental units, history of embezzlements, etc. the agents feel no obligation to disclose it either.

    Here’s a couple of examples that have happened in my own HOA:

    1) A former owner had a connection to someone in the mortgage lending business. She sent a ‘test’ inquiry as if she had a buyer into our HOA applying for a loan. When she got the results back, signed by the manager at the HOA office, it was full of false information. Had that been an actual loan application the lender would have had no reason not to make that loan. I still have the document but not handy at the moment. Off the top of my head the one thing. Question: How many rental units? Answer 15. WHAT? We had one investor that owned that many rental units by himself!

    2) Less than two years ago we had a board member sell her unit. I asked her if she was going to disclose that the HOA had a million dollar loan? She said, the Realtor told her she didn’t have to share that information. The new owner had a discussion with me and of course, I told her the truth. (I despise deceptive people and refuse to be one of them.) She was a very smart cookie. She sought an attorney with plans to rescind the real estate contract and hand the keys back to the seller. She has now sold the unit and moved in less than two years after purchasing. I would assume she contemplated the length of time for a trial and cost of litigation (and learned she could not recover her legal costs) and decided it was faster and less stressful to sell and move on with her life. Not to mention when she talked to me (two months after she moved in) she had already had a few battles with the property manager.

    In all fairness, I think Realtors should be required by law to reveal a property is in an HOA BEFORE they show the property. And when they do they should have to get a signature from the buyer that reads:


    I have been advised the property I am being shown is in an HOA. I am aware should I purchase this property, I am signing away my US Constitutional Rights. I will become business partners with all of my neighbors in a non-profit corporation. And I will become the guarantor on all debts, loans, lawsuits, settlements, liabilities, construction defects, and disaster rebuilds.

    Signed__________________________________________________ Date____________________________________

    The second document should read: The ABC HOA you are being shown has liabilities to be considered as of this date:

    1) Million dollar loan
    2) 14 Foreclosures
    3) 130 Rentals
    4) 27 pending lawsuits
    5) Ten million dollars unaccounted for

    These documents would be no different than the ones a patient signs before having surgery in a hospital. Heck, you get more disclosure about the side effects of a prescription you buy at a pharmacy than you do about the HOA you’re about to buy a house/townhouse/condo in. The drug may cause a rash, dizziness, or muscle cramps, but the HOA could cause you the destruction of your health, happiness, and bank accounts. And the stress of living in one could cause your early death. But today, that is all legally not disclosed to you.

    It’s past time for a BIG CHANGE in the way real estate is marketed and sold! Especially when an HOA is involved.


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