*New Case Law
It is easy to understand how Homeowners Associations (HOAs) have standing to initiate legal action for enforcement of their governing documents or for damage to the HOA’s common areas. However, under what circumstances may a HOA bring a lawsuit on behalf of its members for claims that the individual members may have against third parties? That question was addressed in the recent case of Glen Oaks Estates Homeowners Association v. Re/Max Premier Properties, Inc., (2012) (Glen Oaks).
In Glen Oaks, the Plaintiff/Appellant HOA sued several realtors (Realtors) who had assisted the developers of Glen Oaks Estates (Project) in marketing and selling its parcels. A significant slope failure occurred along parts of the Project’s common area slopes and driveway in 2005. The HOA’s members (Members) then discovered that the soil reports which analyzed the Project’s common areas were substantially defective and unreliable. Though the Realtors were aware of the defects in these reports, they had either failed to provide these reports to the Members or had provided them without any warning as to their defects. The Members also discovered that the Realtors had violated various statutory disclosure requirements and had either intentionally concealed or misrepresented material information, including providing a false budget with a deceptively low monthly dues statement to the Members during the sales process.