There are definite risks when purchasing a condo in litigation. It is important that you understand what the litigation is about and how it may affect your purchase and subsequent ownership. The most obvious questions are what the alleged defects are and whether there have been or will be any special assessments. The upside to purchasing a condo in a complex in litigation is that you can purchase the property at a value. Because it is difficult to get financing for such a purchase, the values are depressed. You may be able to get financing for a purchase in this complex. I recently closed a transaction for a nearby condo in litigation that included financing with only 20% down. Buying a condo in litigation is riskier than the normal transaction but may be worth the risk if you can buy it for the right price. Its important that you understand both the financial and legal consequences of such a purchase.
Tony Sum (DRE #01731561)
Silicon Valley Lofts & Condos