We're in a short sale escrow. The buyers bank has said our condo doesn't have a HOA, therefore we're violating the law.

Asked by Art, Torrance, CA Tue Dec 1, 2009

There's two units on the property (attached at garage only). When we moved in there was no HOA. What gives? There's even a "rider" in our deed that explicity exludes an HOA. Plus the sellers bank wants to see proof of our neighbor's property ins. (huh?).

Stunned in Torrance, CA.

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Jane Grant, Agent, Aguanga, CA
Sat Mar 13, 2010
The problem is that the perspective buyer's lender wants to make sure there is an HOA in place. Lenders want dwellings with "common areas", to have an HOA in place to determine the responsibility of the "common areas".

This is due to the fact that if one of the parties is neglectful of their property or does something harmful to the "Common area", the HOA rules will spell out how it is handled.

Especially if it is an FHA loan that the perspective buyer is obtaining, because FHA insures loans and they have to make sure the property will be taken care of to keep the value stable.
Web Reference:  http://www.soreal.biz
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Keith Kyle, Agent, Manhattan Beach, CA
Sat Mar 13, 2010

It sounds like you're in escrow on a fairly common type of townhome property in the South Bay basically known as a two on a lot. Many times in this situation the two owners have gotten together, decided that they'll each pay their own landscaping and insurance and think that they've dissolved the HOA...which is not the case. They've simply made it inactive but it can be reinstated as you can never completely dissolve it. This may not be the situation you're in, but this is fairly common in Torrance and Redondo in which the sellers or agents claim there is no HOA.....may not be an HOA fee, but always an HOA.
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Connie Erick…, , Maple Grove, MN
Wed Dec 2, 2009
Sounds like your are describing a twin home. Each homeowner owns their structure and land with a common wall at the garage.
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Lydia Yaffe, , San Francisco, CA
Tue Dec 1, 2009
I'm not sure you would be consider a condo without an HOA. You may want to consult a real estate attorney on this one.
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