Home Selling in 87507>Question Details

ncedwards47, Home Buyer in Boulder, CO

We need to sell our townhouse. Association board has filed a lawsuit against the builder; mediation scheduled for January 2014.

Asked by ncedwards47, Boulder, CO Thu Aug 22, 2013

No problem with our unit. We've lost 3 buyers so far because of lawsuit. Afraid our development may be viewed as "tainted". What do we do to sell?

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I recently helped a buyer close a transaction where the condo assn. was in a lawsuit with the developer. There are some banks in town who will loan depending on the specifics of the lawsuit and what they determine the possible exposure of the HOA. If you want to call me with specific location and circumstances, I'd be happy to try and help your situation if possible.
Best regards,
Linda Gammon
Associate Broker
Keller Williams Santa Fe
505.699.3260
0 votes Thank Flag Link Thu Aug 22, 2013
Dang, that's a tough situation for sure. You don't say what the issue is but, because the suit is against the builder/developer I assume there's a problem with the common areas and/or public buildings. While individual townhouse owners are responsible for their own homeowners insurance, townhouse associations must insure the common areas including buildings used by homeowners in common. Thus, if the builder won't agree to make the required repairs, perhaps your association's insurer will. If all that fails, then the HOA will probably have to file a special assessment against all the homeowners to cover the costs of repair.
All this to say that when you disclose the lawsuit to potential buyers, you can also provide the roadmap forward. Since your specific home is, according to what you say, problem-free, then the buyer need only be concerned with the common property issue. Hopefully the association board has already been in touch with their insurance company and has received bids to ascertain what remediation costs would be and, if it comes to that, what the assessment for each homeowner will be, and for how long. The more such information you can provide potential buyers, the better. No one likes walking into a home purchase situation with an unknown financial obligation.
Good luck!
0 votes Thank Flag Link Thu Aug 22, 2013
Truly sorry to hear that. It certainly will influence a buyer's perception of your townhome. All you can do is disclose all of the details of the suit, and hope a buyer can overlook it.

You could also have the property pre inspected and take care of any issues that may be raised. Give the report to the potential purchaser to show your unit is in good shape as evidenced by a neutral third party "expert."

Good luck with the sale!
0 votes Thank Flag Link Thu Aug 22, 2013
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