Condo Association Management Blog

Builder wants loan re-payment from HOA, but has no paperwork

  

 Email Article  

Tweet  

  

  

 delicious  

  

Our HOA received a bill from our builder in December 2011 for loan interest from a loan he originated when he controlled our HOA. The loan was from the builder to the HOA which he both controlled. Over 5 years he made one loan interest payment and just before the HOA was transferred to the residents in August 2011 he used HOA funds that had built built up to make a payment on the principal. He never told us about the loan at our transition meeting but we did find paper work about the loan in the pile of paper the builder passed on to us. When I called him about this bill all he said was that there were papers in the material he gave us! Actually there are no loan papers or a pay back time period. The loan payments were for the operating expenses that the builder received when the Town house community was just beginning and few people lived here. Our HOA is very small and not all the town houses were built. We can pay the interest this year plus( our operating expenses) and write the interest off for tax purposes and begin to pay a very small sum on the principal. Money for a lawyer is not there or could we contact one! We live in North Carolina. Does our HOA have a recourse or can we "go after" the builder legally. It does not appear that the builder violated the by-laws when he controlled the HOA. Any help or suggestions would be appreciated.