Quote:
Originally Posted by chailinchou
Thanks to all for the thoughtful suggestions. Here's what I've learned in the last few days from talking to 2 lawyers and reviewing the status certificate:
1. Lawyers said this is the worst status they've ever seen. Multiple litigations that could drag on for many years with legal fees funded by special assessment on the tenants i.e. high condo fees that could last for years (and get even higher)
2. Reserve fund less than 50% full even after special assessment
3. Banks likely won't lend based on the status certificate
4. High condo fees, legal issues, special assessments, underfunded reserve, distressed owner and difficulty securing mortgage by interested buyers will ultimately result in a serious price correction.
I'm obviously going to stay away now and I hope everyone can benefit from this information. Please note the information above may contain speculations and should not be considered 100% accurate. Do your own research please. Feel free to correct my info or add to the discussion.
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The nature of the lawsuit would be important. Are they (condo corp) the plaintif? if so are they likely to win? Will this than fully fund the reserve study? An example of a common "good" lawsuit would be an owner (s) has not paid their condo fees in years and has thousands of dollars outstanding. This will eventually be recovered and improve the balance sheet of the corp.
I would highly doubt number 3. Regardless you could obviously make have finance approval as a condition.
While none of this is good you might be able to get a good deal because of it. Most Realtors and lawyers will tell you walk away at any complication to cover themselves, but sometimes it is worth looking deeper.
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