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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 11652
Experience:  JD, MBA
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Hi, I am thinking of buying a bank owned lot that was left

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I am thinking of buying a bank owned lot that was left over from a foreclosed builder. There are several lots owned by the bank. The neighborhood has an HOA. Do I have to join the HOA in this situation?
Hello and thank you for allowing me the opportunity to assist you.

A property owner does not generally "join" an HOA. Generally speaking, HOAs are either permitted by covenants on the land, or they are not. If they are, and if there is an HOA, then you have no choice in the matter. If there are no such covenants on the land, then there would not be an HOA. If there are covenants, then they would cover all the property in a particular development since the only purpose of such covenants are to enforce them against one's neighbors. In other words, it wouldn't do your neighbor much good if he was part of an HOA and you were not.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is much appreciated.

Thank you for using our service!
Customer: replied 3 years ago.

I can tell you are a lawyer because I can hardly understand your answer. Can you rephrase your answer in layman's language.

Are you saying I have to follow any HOA rules (including any assessments) if there are covenants on the bank owned lots? How do I find out if there are covenants on the bank owned lots? Do I have any legal options to remove my lot from the covenants prior to purchase?


Thank you,





Hi again.

In simple terms, if there are covenants, then you must abide by them. You can find out if there are covenants by searching the land records for your property. Any covenants will be easily discoverable. You can search the land records by visiting the local court, or you can pay an attorney or possibly a title company to tell you. Assuming there are such covenants, then the answer is yes: you would have to abide by the HOA's bylaws, and the covenants. The covenants can only be removed from the property if all of the other property owners who also have such covenants agree that the covenants can be removed from your property. As I explained earlier, the covenants are there for the neighbors' benefit, not for your benefit. However, the covenants on all of the neighbors properties are there for your benefit.

Is that more clear? Please let me know if you need further clarification, because I'm happy to continue discussing this with you. Thank you for using our service.
Customer: replied 3 years ago.
Yes+ this answer does help me understand what liabilities may be ahead. You seem to favor covenants and the HOA but I am worried about the seen and unforeseeen liabilities let behind by the bankrupt builder. Is there an instrument I should ask the bank for as terms of my purchase to limit my exposure(insurance policy)? Are covenants and addendums recorded by the state, county ? How do I request them so I get the most up to date version?
Hi again.

There is nothing that you can ask the bank that would limit your exposure to any of the recorded covenants, or bylaws of the association. The covenants are recorded in the land records for the county. You can get a copy of the covenants at your local county court. It's also possible that the association itself give you a copy of the covenants, as well as any bylaws.
Customer: replied 3 years ago.
Thank you for your expertise and patient!
You're quite welcome. Thank you for using our service.
Customer: replied 3 years ago.

Can you tell me whether forming an LLC to be used to purchase the building lots would be recommended to limit my exposure raised by my concerns above?

Thank you,



Hi again.

Using an LLC to purchase the building would limit your personal exposure regarding any loans owed for the mortgage. However, it would not negate the requirement to abide by the covenants and bylaws. The owner of the property would have to abide by such rules, whether you own the property or the LLC owns the property.
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