Q: My daughter recently purchased a condo. One month after moving in, the condo association told her they had filed suit against the builder for shoddy work.
Her condo fees will increase 15 percent. The condo association reserves have been depleted to hire a lawyer, and, if the condo building loses the lawsuit (it’s a limited liability company), they are facing up to $1 million in costs to fix the problems.
There was no disclosure about this suit in any papers from the seller or condo association. Where does she start to look for someone, like an attorney, to help her with this mess?
A: First, your daughter might want to talk to a litigator who specializes in new construction real estate purchases. Talk to your local or state bar association and find out who chairs the real estate committee. Get in touch with that individual and explain the situation. Ask who he or she would recommend for the work. Try to get the name of several attorneys. Then, set up appointments with each to see who can help and what they might charge.
From the face of it, it would seem that the seller knew or should have known about this lawsuit, which would make it a seller disclosure issue. The agent for the seller probably knew about this as well (but you can’t know for sure if he or she should have known). But the association did know and would have or should have disclosed it to your daughter if she had asked.
How could your daughter have found this out on her own? Did your daughter request two years’ worth of building board meeting minutes? Or at least the minutes for the last several meetings? Did she ask for two years’ worth of budgets as well as a year-to-date statement of expenses? If she had, the building minutes should have reflected what was going on with a possible or actual lawsuit. The budget might have also shown a line item that disclosed a large expenditure for attorney’s fees or for litigation expenses.
If your daughter bought this property as a foreclosure, it may have been sold “as is.” But who represented her? If she had a top-notch real estate agent, that person should have heard the scuttlebutt regarding what the building was going through. If she used a real estate attorney, the attorney should have requested documents from the condo association
In short, it sounds as though there is blame all around. Her first move is to find some legal help to understand what she is in for. If the property was sold as is and she got the required disclosures from a bank, she might be out of luck. If she purchased from an individual who was out of touch and never knew what was going on, then he might have been truthful in the disclosures but your daughter should have asked questions of the association.
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