A buyer of mine purchased a Coach in an existing land owned
senior, co-operative mobile estate of 62 units, with the land owned by
the co-op, the homeowners owning their coaches and a share of the co-op.
The purchase was a seller financed transaction, with a large cash
down payment. Seller and Buyer were in agreement as to the terms. The
Buyers followed the required protocol and met with the board "HOA" for
approval. All went well at the meeting until the Buyers were asked for
their Identification to verify their ages, and it was discovered that
they were not married. Suddenly there were comments made by a member of
the Board, specifically, "This is not the Love Boat!"
The Buyers were taken aback, but maintained their dignity and
continued on with the interview, and at the end of the Meeting were
given the Bylaws, ( there were no CC&R's) and told, "Welcome to the
Park."
The Transaction continued with paperwork being signed and sent to escrow including information sheets from the "HOA."
Two days before close, the HOA called the Buyers and told them they
were now requiring a credit report, and that their closing would be
delayed until the HOA could obtain the report and review it. The Buyers
were informed that this was the first time the HOA had required a report
from anyone, and that they didn't quite know how to obtain or review
said report. The Buyers provided their own reports to the HOA to
speed things up for the closing.
The Buyer was a business owner who had suffered from a stroke and had
been in rehab for a year, and this was notated on his credit report as
his credit had been seriously effected. The Co-Buyer's credit report was
perfect, along with longstanding Job tenure.
The day before closing, Buyer and Agents for both parties were on
site at the coach to view Seller authorized repairs and a final walk
through. The Carpet in the Coach had been rolled back to repair some
squeaks in the floor.
An Employee of the park, a landscaper came to the door and asked if
he could see the coach, and viewed the carpet rolled back and made a
comment, "Is the coach for sale?" and was told the coach was sold and
closing shortly. He then left after saying it was a very nice home.
Shortly thereafter, several members of the HOA came to the front door
and demanded to know what was going on. They were told that there were
seller authorized repairs taking place. The HOA members then demanded to
know who was paying for the repairs, and were told the sellers. The HOA
members then stated no one was moving in and then were told by both
Buyer's and Seller's Agents, no one was moving in until escrow had
completed. The HOA stated "we didn't start Escrow" and that the BUYERS
were NOT approved because they had bad credit even going as far as
stating an amount! This was outside in the street with several neighbors
watching, along with the repairman and his assistant. The HOA then
demanded the phone number to the seller and aggressively demanded of the
seller's agent to have the seller call the HOA. It was stated that the
HOA didn't know if they, (the board) want to allow seller financing on
any of the coaches as they were worried about the other homeowners.
The HOA then called the seller five times in the next 24 hours, along
with contacting the seller's daughter and demanded that the transaction
be stopped and informed the seller and her daughter of the specifics of
the buyers credit report!
The Buyers were never informed of the HOA'S decision until it was
overhead at the final walk-through. Neither were the Agents of either
Buyer or Seller informed until requesting the denial in writing.
The HOA sent a note to Escrow, and then followed up with a letter
saying the Buyers were denied, Three days later (after the scheduled
close date), to the Agents with no specifics as for the denial.
Needless to say, the Buyers have obtained an Attorney, and have been
informed to continue with closing if they so desire. The HOA has been
served a notice informing them of the negligence and bias of their board
members. Both Buyer and Seller are going to proceed and the HOA is
liable for Attorney costs along with it's members for
discrimination, violation of Fair Housing and Privacy acts.
The closing has been delayed over a month, and the Buyers are finally going to move into their new home next Wednesday.
This event stemmed form a turnover in the HOA board of 7 people! The
former president had left and the power struggle by the Treasurer of the
HOA trying to take control!
I have dealt with HOAs for years and have never encountered such a
train of events! Is it any wonder that many people will buy into an
HOA controlled community?
HOAs can be an asset to a community, but can also be a financial liability when they are not run properly.
Whenever you have a buyer who is purchasing in an area controlled by
an HOA, Please investigate the HOA, it's board members, Bylaws,
CC&R's to the full extent and review the parameters with your Buyer.
Save yourself and your Buyer a lot of Time, Money, and Stress!
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