Home Buying in 91325>Question Details

Madandfrustr…, Home Buyer in Los Angeles, CA

I am currently in escrow in the Los Angeles area, Ca. The lender has requested additional information from the HOA. They are not responding.

Asked by Madandfrustrated, Los Angeles, CA Sat Nov 23, 2013

The seller served me yesterday with a Notice to Perform due in 3 days to remove ALL CONTINGENCIES. Do I need to sign this? What if I don't sign it? Would I get my deposit back? The seller did not request the HOA documents within 3 days according to the contract. He requested them 14 days later, starting the delay. Does this mean he want to get out of contract? What are my choices? My agent keeps saying "don't worry, everything will be ok" . When asked about my 3% deposit she says "we will close soon" I need an answer. I need the deposit back. This property has been on the market on/off and in escrow for over a year. Makes e wonder if there is something fishy going one. Help please.

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7
If the seller was aware of this and did not disclose it, you may have some recourse. If you were to learn that the previous escrows failed to close for the same reason, it would be rough for the seller to deny knowledge.
1 vote Thank Flag Link Mon Nov 25, 2013
Hi Madandfrustrated,

If you have not removed the financing contingency in writing and you cannot get your loan without the HOA information, have your lender give you something showing you cannot get the loan now and why. If the seller will not extend contract and they do a cancellation of contract, make sure you do not sign it unless it states you will get your EMD back. You should get your EMD back as long as the financing contingency has not been removed by you in writing.

Good luck.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Mon Nov 25, 2013
From C.A.R. Legal:

Q 10. Must a buyer remove a contingency regarding a disclosure that the buyer has not yet received from the seller?

A No. Even if the contingency period has passed, under the RPA-CA Paragraph 14B(3), the buyer is not legally obligated to remove the contingencies if any report, disclosure or information for which seller is responsible is not delivered within the time specified in Paragraph 14A. The buyer still has the latter of the 17 days (if this default time is used) or 5 days after the seller gives the buyer the above-mentioned report, disclosure or information to remove those contingencies.

Example One:

If the contingency period ended on Wednesday, July 7th but the seller gave the buyer the common interest disclosures (HOA documents) on Friday, July 9th, then the buyer has 5 days from the 9th, until Wednesday, the 14th at 11:59 pm (under the RPA-CA contract "days" means calendar days), to remove this contingency without being in breach of contract.

On the other hand, if the contingency period ends on Wednesday, July 7th but the seller gave the buyer the common interest disclosures on Thursday, July 1st, the buyer still has until Wednesday, July 7th to remove this contingency--the full contingency period not just 5 days.

Example Two:

If the contingency period ended on Wednesday, July 7th but the seller gave the buyer the common interest disclosures (HOA documents) on Tuesday, July 6th, then the buyer would have 6 days (not 5) from the 6th, until Monday, July 12th at 11:59 pm. If the 5th day falls on a Sunday, the buyer has until Monday to perform.

Note: Although "days" means "calendar days" in the RPA-CA, if the last day for performance falls on a Saturday, Sunday, or legal holiday, then the principal (buyer or seller) has until the next day to perform. This definition applies to every provision in the contract.
1 vote Thank Flag Link Sun Nov 24, 2013
Hi Madandfrustrated,

DO NOT remove the contingencies in writing until your lender has the HOA information they need. If you do and your loan does not get approved, you will NOT get your EMD back. If the contingencies are still in effect, you should be able to get your EMD back if contract cancels. As Gregorio stated below, the HOA may not qualify for the type of financing you are doing. Contact your lender and/or escrow officer to get answers. Again, DO NOT remove contingencies until HOA information is satisfactory to your lender - unless you don't care if you lose your EMD.

Good luck.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
1 vote Thank Flag Link Sun Nov 24, 2013
Sounds like it's a condo and the lender needs the HOA cert. The condo may have issues that the seller doesn't want anyone to find out about, but the lender can order the HOA cert directly from the HOA. The seller has nothing to do with getting this information. You should definitely not remove contingencies before the review of these documents happens. So many condos don't qualify for conforming financing because of litigation or owner occupancy ratios that you would be risking your EMD to remove a financing contingency prior to full and final approval. If your loan officer is not on top of the HOA situation, your problem may not only be with the seller and the agent. Speak to your loan officer, this is their department.

Contact me if I can help.
1 vote Thank Flag Link Sat Nov 23, 2013
Thanks everyone for the answers. We just heard from the lender and they reviewed the HOA papers and they don't have enough reserves and also plan to increase the fee by 36% in 2014. Needless to say as much as we wanted this place, we are cancelling and hopefully getting our deposit back. Bad enough we have to pay for the appraisal, inspection and another document. I feel the seller should pay for them as I am sure they were aware of the situation, Any insight of the cancellation.
0 votes Thank Flag Link Mon Nov 25, 2013
If you have a real estate agent they should guide you through this. Jill is not wrong but just as you should use an agent to buy or sell a property you should contact a real estate attorney. What area are you in? I may be able to refer some to you if you are in my area.
Flag Wed May 21, 2014
I would like to add that the 17 days already passed. He gave us another 7 day extension that have also passed. We requested another 5 days but seller did not sign, instead he served us with the Notice to Perform. Our lender has contacted the HOA via phone and email for 2 days and they HOA is not responding. At this point if the seller is not willing to work with us in "good Faith" and with the past history of this property on/off the market. I don't care if the sale does not go thru but I want my deposit back. As it is I will be out almost $4k for the appraisal and inspection.
0 votes Thank Flag Link Sun Nov 24, 2013
Sorry $1k
Flag Sun Nov 24, 2013
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