Hidden Traps and Liabilities: What Lurks in Distressed Condo and Planned Unit Development Properties?
The situation looks enticing: finished lots or condominium units in a great neighborhood being offered by a motivated seller. The price is bargain-basement, so buying and waiting for the market is a feasible strategy.
This scene is playing out in communities across the country. Failed projects are ending up in the hands of lenders anxious to move properties off their books, and buyers with cash can find deals that look very good. Before leaping at opportunities to purchase condominiums and planned unit developments, investors must look at a number of issues that will never show up in a title report or local jurisdiction development file. Acquisition of condominium units and planned development lots frequently includes special rights and ownership interests of a developer. An improperly structured acquisition may cause the purchaser to take on unexpected liability.
This article first appeared in BUILDERnews magazine.