Wednesday, January 28, 2009

Home Owners Association (HOA) San Fernando Valley

A potential risk I recently encountered was two folds. One was the building was build and the units sold during the height of the real estate market and the other issue was the building had construction defects and the HOA had hired an attorney to address these issues with the builder.

Because most lenders are now requiring a condo cert, the chance of the home-buyer to obtain a home loan was zero. The list of problems the building had was large including water leaks and mold. Also, I was told that one-third of the home-owners where no longer paying their association fee because of pre-foreclosure or foreclosure.

Even if my buyer was able to obtain a loan on the condo, it's possible the home-owners would have been assessed a specific amount to cover lost HOA fees from owners who no longer were paying their monthly dues. There could also be a large assessment for costs to cover the damage to the property until the issues where resolved with the builder (can take years).

If you are considering purchasing a condo or townhouse in the San Fernando Valley, it's important you are working with a professional who can foresee potential problems quickly.

One way to avoid getting yourself into a situation where you might be assessed is to purchase a condo or townhouse in an older building. Another way to protect yourself is to ask questions from other home-owners in the building.

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