DEAR BOB: In August 2006 I purchased an apartment in a condoconversion in the resale market. My seller bought the condo eight monthsearlier direct from the condo converter. To what extent and for how long a timeframe can the developer be held liable for repairs and warranty work to eachindividual unit? For example, if a front-door lock is defective, and thethird-party manufacturer offers a 25-year warranty, who is responsible forrepairs, bearing in mind the manufacturer requires a copy of the invoice?–Helena S.
DEAR HELENA: In a condo conversion, the developer is liableto the homeowner’s association (HOA) for any structural defects, such as afoundation problem, in the common areas. However, if something goes wrongwithin your condo unit after purchase, the developer usually has no liabilityto the owner, especially a subsequent owner who was not the original buyer.
Purchase Bob Bruss reports online.
If you are asking who is responsible for repairing yourfront-door lock, don’t expect the developer to replace it (although a gooddeveloper will take responsibility and then deal with the lock manufacturer).Your best recourse is against the lock manufacturer. Or forget it. For moredetails, please consult a local real estate attorney.
HOME ON LEASED LAND USUALLY NOT ELIGIBLE FOR REVERSEMORTGAGE
DEAR BOB: I have friends who own their home, which is onleased land. The senior-citizen reverse mortgage lender told them the residenceis not eligible. Is this correct? –Anthony L.
DEAR ANTHONY: If the residence is a manufactured house or amobile home on a leased lot, it clearly is ineligible for a reverse mortgage.
However, if it is on a leased lot with an option topurchase, then some lenders will approve a reverse mortgage in such asituation. Owning a residence on leased land is never an advantage and isfrequently a detriment.
ODDS OF LENDER ENFORCING “DUE ON SALE CLAUSE” AREMINIMAL
DEAR BOB: You recently had an item about amortgage-due-on-sale clause where you said it was unlikely the lender wouldcall the loan. What are the odds the lender would find out and call the loandue in full? –Lawrence L.
DEAR LAWRENCE: As long as the monthly mortgage payments aremade on time, mortgage lenders rarely risk enforcing the due-on-sale clausewhen a property title is transferred “subject to” the mortgage.
If a lender should attempt to enforce the due-on-saleclause, unless the transfer is exempt under the Garn-St. Germain Act such as aninterspousal transfer, the new owner can then either pay the lender’sassumption fee (usually 1 percent of the mortgage balance) or refinance withanother lender.
Unless mortgage interest rates skyrocket, a mortgage lenderwould be very stupid to attempt to enforce a residential due on sale clausetoday.
The new Robert Bruss special report, “The 20 EssentialQuestions Smart Home Buyers Must Ask to Avoid Overpaying in a Buyer’sMarket,” is now available for $5 from Robert Bruss, 251 Park Road,Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant delivery atwww.BobBruss.com. Questions are welcomeat either address.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
Copyright 2006 Inman News