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California court: Condo owners must pay assessments on air

Buyers could end up paying after first condo completed or face foreclosure

If you're working with investors considering buying unbuilt condominium space in California, be sure they read the condo governing documents before the purchase. If the covenants, conditions and restrictions (CC&Rs) tie the payment of assessments to the completion of the first condo in the development, buyers must pay assessments on their "air lot" or face foreclosure, a California appellate court has ruled in Bear Creek Master Association v. Edwards. The holding is the first in California applying California's Davis-Stirling Act, which governs how homeowners' associations operate, to a case in which the association's governing documents pre-dated the act yet called for owners to pay assessments from the date the first condo in a sub-development was completed, according to Adrian Adams, a Los Angeles attorney with Adams AuCoin & Kessler LLP, who specializes in California condominium law. "It's long been the practice in California with regard to CC&Rs that the completion o...

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