Meens Temp, Home Buyer in Santa Clara, CA

Does anyone have information about the details of the litigation on Park Townsend Condos in San Jose?

Asked by Meens Temp, Santa Clara, CA Mon Sep 10, 2012

Help the community by answering this question:


The litigation is builder defect. A. Alan Berger is the attorney. I have funded loans in the complex and currently have one going there now. Rates are around 3.96% APR for a 30 year loan with a 20% down payment. We require a 660 credit score. Call me for more details at 800-736-0565, or log on to Thanks.
1 vote Thank Flag Link Wed Sep 12, 2012
It is against the Builder. This is not a surprise because builders have a statute of limitation on their warranty which is about 10 years. It's not uncommon for an HOA and Homeowners to begin a litigation on new construction as the time gets close to 10 years. In this case 8 years.

When a complex has suffered high delinquencies and short sales the budget can fall short for certain repairs. The litigation may or may not have merit. However, when a litigation is against the builder it is common for all electrical, plumbing, siding, windows, elevators and other items to be called out. Then it is up to the Builder and HOA to provide information to the attorney(s) conducting the investigation. If there is no merit then the litigation is settled. If there is merit the litigation is settled and if the funds fall short a special assessment can be imposed on the Buyer.

So even if a lender will finance on the building a buyer must fully understand the future is uncertain. The benefit to buying during a litigation is prices tend to be lower due to the difficulty of selling.

Have an amazing day.
Web Reference:
1 vote Thank Flag Link Mon Sep 10, 2012
>> If there is no merit then the litigation is settled. If there is merit the litigation is settled and if the funds fall short a special assessment can be imposed on the Buyer.
Do you mean after the property is bought, the buyer may still have to shell out extra cash for the settlement?
Typically how long does the litigation last? Is it true that HOA fees are higher while the property is in litigation?
Flag Mon Sep 10, 2012
Thanks everyone for your answers. Appreciate all the good info!
0 votes Thank Flag Link Wed Sep 12, 2012
I would recommend contacting our friends at Silicon Valley Lofts, Eric Woodward at 408.297-5638.

He runs a real estate office out of one of the Live Work Loft locations inside the Park Townsend complex. He is sure to have some very specific details on what the litigation is about and how the resolution is looking.

Good Luck,
Keller Williams Realty
0 votes Thank Flag Link Mon Sep 10, 2012
Hi Meens,

Thanks for your post about Park Townsend. As Terri already noted, most litigation within a homeowners association involves the developer or builder of the community. There is a statute of limitations within California of 3 years for patent defects and 10 years for latent defects where the homeowners association may claim defects in building that compromise the structure or use of the property and sue the builder for claims. This is not a warranty issue, but one of a claim of defect in the building.

The very mention of "defect" in buildings often cause problems within a community and with the lenders who currently have or are currently reviewing refinances or sales within the homeowners association. In most cases, litigation does prevent anyone who needs a loan from purchasing within a community because, frankly, litigation often means the buildings are, in some way, compromised and will require repairs that can negatively affect the financial health and overall sustainability of the HOA.

Because defect litigation can often take years to resolve, and is expensive, the outcome, as Terri mentioned below, is highly uncertain EVEN IF THE HOA wins. This is because legal fees are voluminous and after the negotiations are made and settlement accepted, many times the money collected in the lawsuit is insufficient to cover the actual repairs. As a result, buying a home in a community with litigation can be both risky to the home buyer as well as the lender.

Once the HOA is in litigation, only limited information will be provided to any association member or to prospective home buyers. Sometimes the case has progressed enough to provide a buyer with a more comprehensive understanding of the situation, and sometimes only the barest of information (the lawsuit) is available for review. Either way, as the buyer, you need to conduct a thorough investigation of the community, the lawsuit, and the possible outcome and costs with your agent, your lender and with the representative of the homeowners association before agreeing to purchase the home.

As for actual information about the litigation, get the copy of the original complaint and ask questions once you know more about what is being alleged by the HOA. Good luck!
0 votes Thank Flag Link Mon Sep 10, 2012
Hello Meens Temp,

I do not know the details of the litigation, but I have a specialization in getting financing for condos in litigation. If you need assistance in a pre-approval for an offer on one of those units, please feel free to give me a call or email.

Have a great day.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
Fax: (310) 451-6407
0 votes Thank Flag Link Mon Sep 10, 2012
Thanks Michael. I just wanted to know more about the nature of the litigation before deciding to invest. If there are serious flaws with the construction, how long it is expected to continue etc.
Flag Mon Sep 10, 2012
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