Common areas pose repair quandary

Editor's note: This is Part 3 of a three-part series. Read Part 1:"Condo rules a deal-breaker for some"; and Part 2: "How healthy is your HOA?"

Meet Bernice Ross at the upcoming Real Estate Connect conference in San Francisco, which runs from Aug. 5-7, 2009. She will be available to meet with conference attendees from 12:30 p.m. to 1:30 p.m. on Thursday, Aug. 6, in the Palace Hotel's Ralston Room. Click here to send Bernice a message.

Are you considering buying a condominium? This week's column looks at three additional pitfalls that can trap an unsuspecting buyer as well as how to avoid them.

The first two parts of this series provided three important questions you must ask before purchasing a condominium or planned unit development (PUD). Those three questions are:

• 1. What type of ownership are you purchasing?
• 2. What obligations and restrictions do the covenants, conditions and restrictions (CC&Rs) place on you?
• 3. Is the homeowners association (HOA) financially healthy?

Here are three additional questions that you must also address:

Who is responsible for maintenance and what is the process?

For example, if a pipe breaks inside your unit, who is responsible for the repair? Do you call the plumber or does the management firm handle that? (Many associations have a management firm that handles the maintenance, bookkeeping, and bill-paying on behalf of the HOA.) As a rule of thumb, if the issue occurs in the common area, it is the association's responsibility to fix, not the homeowner's.

While this arrangement may seem like a good one, it can cause problems. I had a client who was selling his townhouse. There were six two-story units per building, and each unit shared a common attic. The termite report came back saying there were termites in the attic and that the building would have to be fumigated. The HOA called its pest control service to do an inspection. If there were termites, the terms of the HOA's agreement required the pest control company to pay for fumigation. The pest control company said there were no termites. The seller was convinced that the pest control company was trying to avoid paying for fumigating the building. Since the seller was desperate to close, he offered to pay to have his portion of the attic treated. The HOA said "no," because the attic was common area. Without a clear pest control report, we couldn't close. Furthermore, both inspections had to be disclosed to the buyer.

I persuaded the seller to obtain a third termite inspection from a different company. The third inspection showed evidence of dead beetles, but no termites. This scenario illustrates how hard it can be to resolve issues regarding the common area. If there had been a termite issue, the next step would have been for the seller to sue the HOA to live up to its obligations as outlined in the CC&Rs.  ...CONTINUED

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