Stick with your gut intuition. Also make sure that your agent is acting in your best interest...not just to get the sale closed.
First off, if a HOA has been having financial problems, and there is a major repair issue such as termite rot that need repair, it's not just in your unit...it's all over the building and the cost will be extreme. If the HOA does not have reserves or money in their account, and repairs are needed, the board can vote to have an "emergency assessment" or just an "assessment" on each condo unit to pay for the repairs. Assessments can be of any amount.
The largest condo assessment that I am aware of was for $150,000 per unit in Marina Del Rey, a very large complex, where the sides of the building were wood and was rotted out, causing some structural damage. Im not saying that that is the case in this building.
The exterior is usually the HOA's responsibility, and the interior is usually the owners responsibility.
Secondly, make sure you get a copy of the CC&R's and Financial Report from the Condo Management Company, go over it thoroughly, make sure you understand what is your responsibility and what is theirs. Also make sure that there are sufficient funds in the HOA reserve account to cover any potential repairs, upkeep, maintenance, etc.
Know what you are getting into. You have not signed off on the termite and hopefully not on the inspection contingency yet. Do sign off until you are totally sure you want to move forward. Usually, the inspection contingency is 17 days (it is negotiable)...where are you in the time frame of the escrow? Have you removed the inspection contingency?
Also, depending on what type of loan you are getting, the lender may require that the termite be completed and/or funds be made available in escrow to do so. Talk with you lender as well to discuss the loan requirements.
Thirdly, go back to your contract...Section I to be paid for by Seller. You may ask for some type of funds to help cover any future HOA assessments.
And, always remember that you may consult with a real estate attorney in these matters to advise you better.
Good luck and all the best,
Kat Becker, Realtor
Prudential California Realty
Keller Williams-Hollywood Hills
Purchasing a condo is different then a single family home. Many of the common maintainence issues belong to the HOA to take care of. This is the beauty of owning a condo vs a single famly home, however, the beauty loses is luster when the HOA has lawsuits against it and no budget to take care of issues long overdue. I would look carefully at this development because the same issues that are bothering you, will bother the next buyer when it comes time to sell.
Your lender is loaning most of the money for the purchase and wants to know all present issues with the property, including termite infestation.
Good luck again,
But for your own information, you should always get a termite inspection regardless of what the lender needs as part of your own due dilligence.
Kathleen's answer below is a good one.
1. Of course you should not waive your rights. Why should you? Interior work on a condo is the seller's responsibility, if it was agreed to. Make sure you have a WPA, or Wood Destroying Pest Addendum, as part of your contract. It indicates who will pay, and and what exactly will be paid for.
2. The larger issue is an underfunded HOA. This is a problem you are taking on now, for the duration of your tenancy, and for when you try to sell. The same concerns you have now will be the concerns of the next buyer as well. This may result in difficulty selling, or selling at a reduced price as compensation.
There are plenty of other well-funded associations out there, in buildings that are well cared for. Perhaps it's time to look elsewhere.
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If they were going to pay by signing the waiver you did decide to forgo them paying.
Most HOAs will cover exterior maintenance in condo/town - home situations. Have you tried calling them to see if they will fix it? If I was your agent I would see if I could get it fixed before the close of escrow.
Per Ca. purchase contract I am confused as to why a termite is just being done and they are worried about closing on time. Seems it should have been done much sooner or you have time.
Talk this out with your agent. Also put your concerns in writing. If they don't address them speak with their broker before you completely back out of a property you like. If not... there will be more condo's coming on the market... trust me.
Based on my experience, I can tell you that VA, FHA, and conventional loans require termite clearance certificate. If you're getting a conventional loan with 20% down or more, your lender, maybe, may not be required it. Normally, HOA is responsible to keep up building clear from termite issues in what consists of exterior walls, structure and common residents structures. And owner is responsible for interior walls and other interior structures inside the unit that may be infested. Your lender might be getting this termite clearance certificate from the HOA, but you must also get an interior termite inspection and clearance certificate from your Seller according to sale agreement. It's like getting two termite reports and clearances: One for building and the other one for the unit inside. In some HOAs, they may cover everything.
What maybe you're being asked to waive is to free the Seller for this responsibility because HOA has current termite clearance to give to your lender.
Sometimes sellers offer a credit to the buyer versus doing the work, again-talk to your Realtor, they should be able to help you through this. If you still have questions, you can always go to your Realtor's broker to seek more answers.
Good luck and Congratulations on your new home purchase!
Have a great day,
Heather Paul, Realtor