The Lie: You knew what you were getting into when you bought your home.
This statement is offered as the usual line of defense whenever a board of directors is accused of misconduct. It is an excuse that many homeowners are already very familiar with.
“By purchasing a home in Shavano Ridge, you accepted the covenants that govern our community and you are bound by them.” Out on the Ridge, February 2004
That quote states that the simple purchase of a home in this subdivision constitutes full disclosure on the part of the seller and acknowledgement of all restrictions on the part of the buyer. There is no suggestion that a verbal or written disclosure actually take place. In short, what they are saying is buyer beware.
The notion, that it is solely the obligation of the homeowner to determine the true nature of the property, is further emphasized in this next quote:
“…a homeowner is on notice of the existence of deed restrictions/covenants by the very fact that such documents have been duly filed and registered with the appropriate state and county entities.” Shavano Ridge Meeting Minutes for August 2004
What they seem to be saying here is, “catch us if you can.” When you read that passage, you can’t escape the notion that somebody is trying to hide something from you.
The truth is that, although sellers are required to make disclosure of the CC&Rs at some point in the sales process, thanks to the lobbying efforts of the industries trade organization, the Community Association Institute (CAI), the law leaves it up to the sellers own judgment as to when this information should be revealed. Many if not most, homebuyers are unaware of the existence of deed restrictions and are not properly informed of their true meaning by their sales representative. As a March 2004 homeowner survey revealed, most Shavano Ridge homeowners were unaware of what they were getting themselves into when they bought their home.
“When you were buying your home, do you believe the seller informed you of the deed restrictions in time for you to make a well-informed decision to buy?
YES – 29; No-42.”
It is no secret that this confusion on the part of the buyer is created by design. Over the years the CAI has lobbied legislatures across the nation to limit their responsibility regarding the disclosure of deed restrictions prior to a sale. Consequently, homebuyers are often only made aware of the existence of these restrictions at the moment the final documents are signed. This untimely disclosure assures the seller that the buyer is emotionally committed to the sale and is not likely to back out of a deal when they finally are made aware of the deed restrictions. It also assures the seller that the homeowner will not have an opportunity to read the deed restrictions prior the sale. For the seller, the final moments of the closing of a sale is the most optimal time to reveal the fact that deed restrictions apply. When the developers were selling homes in Shavano Ridge, this is the tactic they used. In interviews with recent Shavano Ridge homebuyers, it was not at all surprising to find that this was also the selling practice preferred by resale agents. However, it should be noted that just reading the CC&Rs will not provide buyers with a true understanding of the trouble they may be facing if they decide to purchase the property, since nearly all conflicts are a direct result of a board’s interpretation and creation of restrictions.
Obviously, the industry feels that timely disclosure of deed restrictions would have a negative effect on sales, and they spend a great deal of time and money lobbying lawmak