Condos taken off the market and are being re-rented. Concerned Condo-Owner

[Vaviana]

What is the name of your state? California

In October, I purchased a condo in a building with 341 units. The building is a condo conversion and I was told that leaseholders were being either given the option to buy or vacate. The building would be entirely homeowners in about a year-18 months. As an incentive, the builder covered the first year of HOA dues and property taxes through July 2007. It is a luxury resort-like community and the HOA dues definitely reflect that. I had to agree not to sell for at least a year.

In mid-December I noticed that the sales office was simply gone, signs ripped off the walls and everything and the phone number for a leasing office was posted on the locked door. I called and sure enough they are off the market and are being leased again, even with year long leases. Needless to say, I am very concerned about this. I was sold a unit in what was supposed to be a community of owners, not of renters. I am concerned that the amenities will go back to being abused and damaged, and the value of my home will drop, the HOA is also fairly meaningless at this point since only 70 of the 341 units are owned.

What is my legal recourse in this situation? Has anyone ever seen this situation before?

Thanks!

[tranquility]

Actually, all the units are "owned". It happens all the time. To find out what the situation is, the deeds and HOA documents would need to be read in detail.

[danno6925]

If you want to determine who owns a particular property, simply head down to the county land records office and look up your deed. Each parcel of land will have an identifying number. In a large condo building you may have what's referred to as an "air lot" - means it's in mid-air. Ask the clerk to help you look up each of the 300+ lots in your building, each time taking note of the owner's name.

Some communities such as yours will require a certain percentage of units be owner occupied. Read the great big package delivered to you on or before settlement day that pertains to your HOA to figure out if the building is (or isn't) in compliance. You should then join your HOA's board of directors, bring them up to speed on the situation and insist they be proactive.

[lcannister]

Originally Posted by danno6925

bring them up to speed on the situation and insist they be proactive.

Playing devil's advocate here, if things have gone south (70 of 341 units sold) and the developer declares BK, besides getting in line what difference does it make what "your rights" are in the short run which may actually be years before new ownership is determined?

You do need to stay on top of every single move though.

[nextwife]

It is also entirely possible the entire package of remaining units will be sold to a different developer who feels they have a better ability to market and sell the units. I've seen that happen a number of times. A year from now, you may see them back on the market under a different developer name. This developer may have spread himself too thin, had too many projects, too little (or too ineffective) marketing, ran out of short term financing and the lender would not extend his note, other financial or personal problems that impacted the current project. Whatever. There is still a very good chance the project will untimately "go".