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Old 06-05-2013, 12:44 PM
 
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A condo buyer usually has to be approved a condo board. I am wondering what are their usual financial requirements for a potential HOA member. Would a condo board deny a condo buyer who doesn't have guaranteed income?

I am in the beginning stages of starting a small company with a partner who lives in a major metro area. I will move there this summer and plan to buy a condo for myself (all cash offer). I will not have any immediate employment income, nor will I have a stable income once the business opens. I will be living off my savings while getting the business running. It very well could fail within the first year. In that case, I would stay in the city to live and pursue other employment opportunities.

Even with zero employment income, I can still afford the monthly HOA and my living expenses for years with my liquid savings after buying the condo. All my debt has been paid-off on-time and I have a flawless credit report. (The business will not require any more cash or loans - only if we want to grow the company). If emergency expenses or HOA special assessments arise, I have long-term CD's I could cash-out immediately. Would a condo board take these financial factors into consideration to approve a new buyer without a stable income?

Last edited by Sky-Blue; 06-05-2013 at 12:55 PM..
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Old 06-05-2013, 01:22 PM
 
Location: San Francisco
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I thought it was only co-ops where you needed to be approved by the board, and not condos?
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Old 06-05-2013, 01:31 PM
 
Location: Baltimore
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I thought the same thing.
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Old 06-05-2013, 02:05 PM
 
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I've heard the condo boards are protective of who can become an HOA member because they will be actual neighbors. One poor HOA member can spoil it for many. That's why condo boards do financial reviews & criminal history check and even in-person interviewing to judge the buyer's mental/emotional state.

Or, do most condos allow anyone who signs and follows the CC&R?
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Old 06-05-2013, 02:32 PM
 
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It used to be that way re: condo boards not having the rigorous approval process that cooperatives do. But, in a down market, condos tend to suffer first and the most so in many areas, condo boards are scrutinizing potential buyers a lot more.

If you buy outright and have 2 years liquid maintenance costs in the bank, I don't see it as an issue. It might be in some areas of NYC but for the most part, I think the OP will be fine.
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Old 06-05-2013, 02:54 PM
 
Location: Florida -
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Of several condo's we've owned (two of which I was on the board), only one had any 'pretense' of an HOA approval of buyers. Generally, these are only a 'meet and greet' type of thing -- and certainly not an actual 'approval.' I know of no legal authority allowing HOA's the right to refuse ownership. (Some do reserve the right to approve renters and lease agreements).

It's the bank's business, not the HOA's, to approve people financially. Once the bank approves a buyer financially, the HOA has no financial basis for refusing ownership. Further, I can't imagine any condo willing to face the litigation responsibility that would likely fall-out of any attempt to refuse ownership.

Recent legislation has strengthened the ability of Condo HOA's to collect delinquent HOA fees (Tri-party leases, extended bank payback periods, shutting off amenities /access (this one is very tricky)). In summary, the "HOA must approve potential buyer's" ... really has no teeth.
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Old 06-05-2013, 03:36 PM
 
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I have heard also that some condo boards are scrutinizing potential buyers to insure that they are not going to be investor owners.

With the tightening of FHA, Fannie & Freddie regulations on lending in complexes with high investor ratios, some associations are doing whatever they can to keep investor numbers low. However, I think legally, regulations on investors and renting may also have to spelled out clearly in condo docs and by laws or should be.
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Old 06-05-2013, 05:19 PM
 
Location: The Triad (NC)
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Quote:
Originally Posted by Sky-Blue View Post
A condo buyer usually has to be approved a condo board.
OH?

Quote:
I am wondering what are their usual financial requirements for a potential HOA member.
What has your agent told you?
Have you even signed with an agent yet?

Quote:
Would a condo board deny a condo buyer who doesn't have guaranteed income?
I'd be more concerned about what the mortgage lender says on that.
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Old 06-05-2013, 05:19 PM
 
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When purchasing my current condo, there was no interview or background check or financial check. Just the CC&R's. I'd have been weirded out if they wanted to interview me, honestly.
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Old 06-05-2013, 06:06 PM
 
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Never ever heard of that with condos. Co-ops, yes, because you're purchasing shares. But any condos I've known neighbors don't necessarily know a single thing about each other unless they decide to meet up. While one shares the outside of a condo and lives in very close proximity, one owns the inside outright.
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