DEAR BOB: I went to Phoenix to look at new homes for sale. I found a nice development and put a deposit on a lot and house. A separate sign in the lobby s read: “No investors or second-home buyers.” This is not a condo development, nor is it a gated community, nor does it have a homeowner’s association. Can a developer limit to whom it will sell its houses? – Sarah B.
DEAR SARAH: Yes. Unless you are in a protected class, such as a minority, the seller can refuse to sell to you. To illustrate, a seller can refuse to sell to a buyer with inadequate income to afford the home or bad credit (unless the buyer pays all cash, of course).
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You might recall, for example, a few years ago a California home builder in Bakersfield refused to sell his new homes to lawyers (presumably because lawyers tend to sue home builders, often over minor home defects). The court said he could discriminate against lawyers.
After your developer accepted your purchase offer in writing, he can’t later refuse to sell to you when he discovers you are an investor or a second-home buyer. For more details, please consult a local real estate attorney.
SHOULD BUYER SUE SELLER FOR CARPENTER ANT DAMAGE?
DEAR BOB: I bought my home in June 2001. Recently, a rotted trim board was removed from under a sliding glass door. Carpenter ants poured out. There is severe structural damage. In 2000 the sellers replaced the three sliding glass doors. All three doors now have structural damage. The trim boards had to be removed, thus exposing the ants. The exterminator said in writing the ants have been here at least five years. The former owners gave me a seller’s disclosure form saying they did not have an exterminator nor know of any damage to the house. If I hire a lawyer, what are my chances of winning? – Elaine K.
DEAR ELAINE: I suggest you forget the matter. Proving (1) there were carpenter ants in non-accessible locations in the house three years ago would be very difficult, and (2) the seller knew about the carpenter ants but failed to disclose them would be even more difficult.
If you had discovered the problem a few months after the home purchase, the situation would be much different. Chances are when the seller replaced the sliding glass doors in 2000, there were no carpenter ants after the replacement. Few people would replace three sliding glass doors without also repairing any obvious damage from the ants.
Unless you can prove the home seller knew about and concealed the carpenter ant damage, I suggest you forget it and move on.
CAN CONDO OWNER’S ASSOCIATION CHARGE EXTRA FEES TO ABSENTEE OWNERS?
DEAR BOB: I own a single-family rental house, which is in a homeowner’s association. It makes the absentee landlords like me pay a $100 extra fee per month. The complex has a small common area, but no other amenities, such as a pool or tennis courts. The association’s board recently passed a new rule requiring landlords to pay $1,000 for each new tenancy to “keep the complex looking good, as tenants usually do not care as much about the houses as do homeowners living in the units.” We have always been very particular about our tenants. We also use a rental agency that screens our tenants. We pay for a weekly gardener to take care of the yard and keep it in showcase condition. The house is only 3 years old and is in perfectcondition. Our neighbors are very pleased with our tenants. We think the association is out of line with this new “landlord rule,” which discriminates against landlords. Is this legal? – Jim W.
DEAR JIM: I hope you got the very obvious message the homeowner’s association doesn’t want renters. If the percentage of renters in a condo complex rises above 20 percent to 30 percent, many lenders refuse to make new mortgage loans or they charge higher interest rates, making resales difficult.
The reason is when there are too many renters in a condo complex, the quality of maintenance usually declines. Most absentee landlords don’t do as good a job managing your tenants as you do.
It is perfectly legal for the homeowner’s association to charge extra monthly fees for rental units if they can show there are extra expenses involved, such as controlling rowdy tenants. Last time I checked, there is no law prohibiting discrimination against owners of rental units. Most towns even require rental-unit licenses or permits.
I suggest you get involved with your homeowner’s association. Attend the monthly meetings to get acquainted with your fellow condo owners. Volunteer for committees, such as the building and grounds committee. When the annual election occurs, volunteer to run for election so your voice can be heart.
Another obvious alternative is to sell your rental condo and enjoy your profit.
The new Robert Bruss special report, “Robert’s Real Estate Rules: How to Avoid the 10 Worst Home Buyer Mistakes,” is now available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.
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