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CalAttorney2
CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience:  I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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Im under contract to purchase a condo in Ohio. After 6 weeks

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I'm under contract to purchase a condo in Ohio. After 6 weeks of trying to get a loan, the process is being delayed because 20% of the residents are delinquent on their dues. The bank is trying to get Fannie Mae to make an exception, but I'm not sure if i want to buy the condo if the hoa has a delinquency problem. If there's nothing explicitly in the purchase contract regarding hoa finances, am i legally permitted to back out.
Hello and thank you for your question. Was your contract contingent on your approval and review of associations documents, including budgets?
Customer: replied 4 years ago.
I don't know. All i know is that it was contingent on financing and inspection.
Do you have a copy of the contract? Generally when an association is involved the contract is contingent upon the purchaser receiving the Bylaws and budget and approving those documents.
Customer: replied 4 years ago.
I don't see anything in the contract papers i have, that establishes that.
Have you already had the property inspection?
Customer: replied 4 years ago.
Yes, the only thing I'm waiting for is to see if Fannie Mae will make an exception to the 15% delinquency guideline.
I can understand your concerns with regard to the 20% delinquency rate. Is this a real estate board approved contract?
Customer: replied 4 years ago.
It was made up by a licensed realtor so i would assume that it's board approved.

Without having a provision in the contract making the purchase contingent on the purchaser's approval of the association Bylaws and financial information, there is no legal means to cancel the contract on this basis. If you do not get approved for your loan due to the HOA delinquency percentages you would be able to cancel the contract lawfully under the financing contingency.


Please feel free to ask me any additional questions that you may have with regard to this matter. It would be my pleasure to continue to assist you.

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Dear Customer,

I am sorry that you are unhappy with the previous attorney's response. It is correct information.

I am providing an additional response only because you most likely have the right to instruct your bank not to take additional steps to attempt to get financing. Your obligations to pursue financing under traditional purchase contracts are "reasonable efforts" these do not include additional efforts to procure financing in the face of unusual circumstances, including those caused by poor financial condition of the HOA.

The prior expert is also correct that you need to review your contract to ensure that you are on solid footing to exercise this right to instruct your bank in this manner. Check the terms of your contract and see what steps and obligations you have to obtain financing, (a clause regarding an ability to obtain financing means that the bank takes in all issues, not just the buyer's own financial history) if you are only required to take ordinary steps, you may be able to stop at this point - however, I would suggest that you seek a local attorney's opinion so that you are able to receive a specific legal instruction as to your situation (something we cannot provide here) and proceed under those instructions appropriately.

I do wish you the best with this matter.
CalAttorney2, Lawyer
Category: Real Estate Law
Satisfied Customers: 10244
Experience: I am a civil litigation attorney with experience representing HOAs, homeowners, businesses and others in real estate matters.
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