Replies to This Discussion

Permalink Reply by Pattilynn Guilford on June 29, 2012 at 4:45am

not enough information here. 

Permalink Reply by Matt on June 29, 2012 at 4:51am

We are trying to purchase a unit in our building.  The building has 3 total units.  Its a very, very small HOA and we are self managed - i.e., I take care of all the duties, issues, collections, etc.  

BOA will not allow me to put an offer in because I am part of the HOA and they say this violates the arm's length transaction.  I would be more than happy to resign from it and let the 1 other person in the building handle everything - damn, I'd be happy if he did that regardless of the SS or not!!

It feels like such a gray area - we have no relation to the seller (deceased) or the estate (insolvent) and the unit hasn't paid HOA fees in years.  There is no relation whatsoever besides the fact that I live in the building and someone has to maintain the properties therefore I am labeled as part of the HOA and now considered 'related' to the seller.    

Permalink Reply by Celeste ODea on June 29, 2012 at 4:48am

No, not unless you are related to the buyer/seller.

Permalink Reply by Matt on June 29, 2012 at 4:52am

I am the buyer.  

Permalink Reply by Susan Neal on June 29, 2012 at 5:39am

I would say that it may depend on whether it was the HOA that was foreclosing, but you need to discuss this with a real estate attorney.

Permalink Reply by joe beauchamp on June 29, 2012 at 2:23pm

There is not 1 arms-length agreement. They depend upon the investor who owns the loan. Whoever you talked to you should be able to get you a copy of this particular one. the BOA one has no doubt changed in the last 2 months - like they have changed many forms and rules - on the fly. I had several conversations with top BOA people on this.

I recommend that you get a copy, look it over. The BOA one said that you buyer/seller cannot be related nor can they have a business relationship. I asked for clarification since we are all related and if I am using Con Ed for electric and the seller is using Con Ed, do we have a business relationship? 2nd cousin? 3rd? No response when I ask for specific cut-offs.

They use at least 1 database for relatives - won't talk about. I assume that if they don't talk about it, they won't have to legally defend their decisions from using it. So, I'd say unless you feel that you clearly have a conflict, go ahead and sign the agreement and let them run their database, etc. to tell you if they are concerned.

The worst thing I could think of is that you have some power over the seller to force him to sell to you at a nice low price - or you can have some deal with the seller to "sneak" the property back to him somehow - but you would be signing something to cover that sort of thing, too - usually part of the same agreement. That is what the bank is looking for. Anything that gets them a worse price because you and the seller played games or (because bankers are vindictive beasts) anything that doesn't completely hurt the seller. (The seller can buy an identical place next door for $100K but the bank will refuse to sell him the house he is in for the $100K because he should "pay" for "cheating" the bank out of the other $100K that he still owes them. Make sense? Only if you want to punish the seller as much as possible. Make him pay to move next door!)

I'm guessing you can look at the agreement and see it isn't a problem..