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HOA Software
By CondoAssociation.com • June 19, 2021

Does former condo owner get returned funds?

I own 1 unit of a 2 unit no fee condo. In 2018 there was a fire and both units had damage. Once the insurance settled a check was sent to the association (both units are 50/50 partners in the association) and the bank that holds my mortgage. The other unit also had a mortgage but their bank was not named. My bank went through the run sheet of how the money was to applied and withheld all funds that were allocated to the exterior of the building (roof, siding etc) and anything that was allocated to my unit. Approx. $112,000 was returned to the association for the other unit. The other unit owner opened a bank account in the name of the association (I am not named in this account) and deposited the check. We both started to do work on our units and then unit 2 just stopped working on their unit. There was some work to be done that belonged to unit 2 that was never completed like adding their back exit stairs from their deck. They finished these stairs just a couple of days before they sold the property “as is”. They completed them just so they could get their certificate of occupancy from the city. We had come under budget on some of the exterior work so my bank has been holding $18,000 that they refused to release until an inspection of the home had been completed and they were satisfied that all repairs had been made. We both used the same contractor and he said they had spent approximately $45,000 before they stopped working on their unit. They have now sold the unit as is and the new owners took possession several days ago. They are now responsible for completing the work the unit needs including a leak in their bathroom that the previous unit never addressed 2 years ago. It wasn’t an issue for me because the unit was not livable so no water was turned in. It has now been 3.5 years since the fire and my bank has been holding this money for over 2 years. I should also mention that because we are on a shared insurance policy and she could not submit receipts for recoverable depreciation for her unit I also could not get my recoverable depreciation of $7100. We used a public adjuster to negotiate a settlement for us and he assured me that I will never get that money. The former owner is now asking me to contact the bank and get the rest of the funds released so she can take her half of coming in under budget. But if the funds are returned to the “association” is she eligible to receive them since she is now no longer part of the association?

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Please note that blog comments and postings are not legal advice, rather only the opinions of our readers.
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