A customer of mine recently purchased a townhouse in Brooklyn Center. It was a 1970s vintage with 3 bedrooms and they paid $29,900. It is in terrible shape and needed everything (carpet, paint, kitchen, bath, furnace). It was also filthy and looked like some of the college houses I had gone to parties in. The carpet was sticky and there was ketchup on the ceiling of the kitchen!
After getting the offer accepted, we received the association docs. Needless to say that I was dragging my feet on reading this 117 page document over the weekend. My customer, being an attorney, dove right in. Deep within the document were the “rental rules”, which went on to say that a unit in that association may only be rented if the owner lived in the unit for at least 1 year prior to renting it. [Insert gnashing of teeth by me, here].
Why didn’t the listing disclose this? Why didn’t the listing agent ask me if it was an investor buying this property? We promptly canceled this PA and will be moving on. Keep an eye out for this when purchasing a condo or townhouse. It is more common than you may think.
4 comments
#1MN First Time Home Buyers ProgramsFebruary 2, 2010, 9:57 am
That’s where the CIC Addendum and Contingency comes in handy here in MN! At least they took the time to read the HOA documents and make sure they didn’t go through with the purchase.
#2eagan homes for saleFebruary 4, 2010, 2:55 pm
It can be very frustrating dealing with these disclosure issues.
#3John GallFebruary 6, 2010, 1:34 pm
I had a landlord in a required class tell me that when he owned a townhome in an HOA that put a rental restriction in place he converterd his lease into a contract for deed with an easy out clause or something like that. Have you heard of this being done to allow the purchse of cheap townhomes that may have rental restrictions?
#4Scott FicekFebruary 6, 2010, 8:27 pm
John-
I have not heard of that before, but it sounds like a good idea.
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