This post today has me in a bit of a pickle. There is a condo building on Capitol Hill that is teetering on the edge of disaster. I’m acutely aware of the situation, but hesitant to throw the project under the bus. What I do know, is that my client and I decided that it would be best for her to walk away from the purchase due to potential financial short-fall from a major upcoming expense. An expense that could cost her and the other home owners thousands of dollars in a special assessment. When we reviewed the re-sale certificate last week it became evident that the project was in trouble. As we reviewed the meeting minutes, we stumbled upon the issue and it became quite clear that the unit was too high risk to purchase.
The project has less reserves than it should, the building needs a new roof, it needs to fix problems with the windows, could have water damage and it may need to file a lawsuit with a developer that is no longer doing business. This is what most would consider a recipe for disaster. Situations like these are a constant reminder of how important it is that you review your re-sale certificate. As I mentioned before, I have made this mistake myself when purchasing my own unit back in 2007. Read Here
Bottom line is that you MUST do your homework before you purchase. The last thing anyone needs is assessment of $5,000-$15,000 dollars or more after moving in. In addition, any project currently in litigation becomes almost impossible to finance.