PA: HOA Right of First Refusal

[pixelrogue1]

What is the name of your state (only U.S. law)? PA

Pennsylvania

HOA condo docs include right-of-first-refusal for any sale; which has been smooth for decades.

We discovered that one unit (which has been on the market for quiet some time) is now under contract. There was no right of first refusal, and language has been vague.

While this has been brought to the attention of the seller, the seller has yet to provide a copy of the offer and is proceeding with inspections etc.
The agent also refuses to provide a copy citing PA Law trumps condo bylaws, along with a wall of fire and brimstone language.

HOA wants to support the sale, yet is feeling pushed to seek legal council given the reluctance, language and behavior observed.

Thank you for any insight.

 

[LdiJ]

What is the name of your state (only U.S. law)? PA

Pennsylvania

HOA condo docs include right-of-first-refusal for any sale; which has been smooth for decades.

We discovered that one unit (which has been on the market for quiet some time) is now under contract. There was no right of first refusal, and language has been vague.

While this has been brought to the attention of the seller, the seller has yet to provide a copy of the offer and is proceeding with inspections etc.
The agent also refuses to provide a copy citing PA Law trumps condo bylaws, along with a wall of fire and brimstone language.

HOA wants to support the sale, yet is feeling pushed to seek legal council given the reluctance, language and behavior observed.

Thank you for any insight.

So, the HOA wants to disrupt the sale over a matter of principle? Even though the HOA has no intention of exercising the right of first refusal?...and for someone whose unit has been on the market for a long time no less?

That is the kind of petty nonsense that gives HOAs a very bad name. I would do my best to get board members voted out who wasted the HOA's money over something like that.

 

[HRZ]

I am not a big fan of HOAs ..but that is not the question.

THere is a major problem / precedent that is HOA fails to follow its own rules that it has problems to enforce them later.

The agent does not work for the HOA and has $$ incentives as in Commission to jawbone whatever ..and I doubt the agent has a license to practice law in PA...and the local Bar might not be amused either about the unlicensed practice of law in their County either. . .

OP you are hard to follow...either there is a right of first refusal or there is not And I'm a bit surprised that it did not come up as a matter of a prudent title search ..then again bylaws might not be there....I just participated in a title search re a property in a HOA in PA this week..but rely on counsel. ( and along with some obscure repurchase rights were restrictions against raising swine ...no clue what is in your bylaws ! ...and in my example the seller provided potential buyer the wrong bylaws..after being prodded, ..I wonder what bylaws were provided to this buyer, if any. )

Personally were I in HOA leadership I would send multiple written copies of a clear notice to seller and agent with an exact quote of the bylaw as to right of first refusal. And NO further comments or opinions .. if there is such a right , the title insurance firm will give buyer a bit of an awakening!

I am aware of one Association where the potential buyer comes before Association committee first ....but you didn't ask any such question.

 

[Zigner]

OP you are hard to follow...

If that ain't the pot calling the kettle black...

 

[pixelrogue1]

So, the HOA wants to disrupt the sale over a matter of principle? Even though the HOA has no intention of exercising the right of first refusal?...and for someone whose unit has been on the market for a long time no less?

That is the kind of petty nonsense that gives HOAs a very bad name. I would do my best to get board members voted out who wasted the HOA's money over something like that.

While we want to support the sale, we can support the sale w/o giving up the rights and this isn't just about principle, we have no idea the price or terms - so this property could be getting dumped for all we know. This isn't principle, it is practical best interests for the HOA.

 

[pixelrogue1]

Let's simplify...

Let's simplify as there has been a fair amount of opinion yet we haven't addressed the question.

1) Does PA State Law trump local HOA bylaws?
2) Does PA State Law prevent an HOA (who's bylaws include right-of-first-refusal) the actual right-of-first-refusal?
3) Does PA State Law prevent the owner (or seller's agent) from sharing a written offer w/HOA. (no one in HOA is a buyer)

 

[Zigner]

Let's simplify as there has been a fair amount of opinion yet we haven't addressed the question.

1) Does PA State Law trump local HOA bylaws?
2) Does PA State Law prevent an HOA (who's bylaws include right-of-first-refusal) the actual right-of-first-refusal?
3) Does PA State Law prevent the owner (or seller's agent) from sharing a written offer w/HOA. (no one in HOA is a buyer)

If you wish to pursue this, your HOA will want to retain counsel. Really.

 

[HRZ]

OP you are really asking wrong questions ..and you don't need a lawyer to simply send the seller and the agent written copies of the exact words in the by laws..and I suggest snail mail, certified RR snail mail and email all three .


1.!

 

[LdiJ]

While we want to support the sale, we can support the sale w/o giving up the rights and this isn't just about principle, we have no idea the price or terms - so this property could be getting dumped for all we know. This isn't principle, it is practical best interests for the HOA.

So, if the seller IS dumping the property is the HOA in a position to exercise right of first refusal and to buy the property themselves? Is the HOA in a position to hang on to the property for a very long time to see if market conditions improve so that the unit can be sold at a higher price? If the HOA is not in a position to exercise a right of first refusal then the HOA should be backing off.

 

[pixelrogue1]

No one has seen the agreement of sale. If the price is low then, yes, the right-of-first-refusal will be exercised.

 

[LdiJ]

No one has seen the agreement of sale. If the price is low then, yes, the right-of-first-refusal will be exercised.

Ok, then the HOA needs to make it clear to the owner what its intentions are.

 

[HRZ]

YOu need NOT announce your ultimate intentions too soon...absent data

But I darn well think you best send /deliver written exact copy of HOA provision to seller and agent and NO editorial comments with perhaps an exception of spelling out exactly where / whom to send ALL information relative to the proposed transaction. And clear record of having done so.

Perhaps you have done so already ...but I didn't 't see that in your post.

PS if any one knows who the intended buyer is...I'd send intended buyer a copy as well.

 

[LdiJ]

YOu need NOT announce your ultimate intentions too soon...absent data

But I darn well think you best send /deliver written exact copy of HOA provision to seller and agent and NO editorial comments with perhaps an exception of spelling out exactly where / whom to send ALL information relative to the proposed transaction. And clear record of having done so.

Perhaps you have done so already ...but I didn't 't see that in your post.

PS if any one knows who the intended buyer is...I'd send intended buyer a copy as well.

I totally disagree with you. I fact I will go so far as to state that I believe that you are dead wrong and that your advice on this issue is horrible.

It is most likely that the seller does not want to cooperate with the HOA because the buyer is afraid that the HOA will screw up the sale of a property that has been on the market for a very long time.

If the seller is made aware that the HOA possibly intends to exercise right of first refusal and buy the property themselves, therefore they will make a sale no matter what, then the seller is more likely to cooperate with the HOA.

 

[HRZ]

Well I think that view is questinable as well, there is no need to broadcast your intentions prematurely . THis is not about the art of a deal by Donald .....but hopefully we both agree the OP needs to be proactive to make the seller and agent well aware of the precise language of the right of first refusal...I see the other side...by LDIJ but you don't know terms of deal so,what's to exercise ?

EIther way you see it...get it moving !

IF the deal gets rushed thru it may be hard, expensive or unlikely to unwrap it in favor of exercise of your right to do so. .

Be proactive.

 

[HRZ]

I'm concerned that you make it quite clear to everyone in writing that such a right exists ...PRONTO .

You didn't post and may not know...is this right a matter of public record..like on a deed?

THe last one I saw in PA was recorded...but you address yours.