Thursday, June 28, 2012

The Consumerist » Condos Sold Without Owners’ Permission For 1/3 Their Value

The Consumerist » Condos Sold Without Owners’ Permission For 1/3 Their Value
"Imagine that you've recently purchased a condo for $100,000. The complex where it's located is about 90% rented, and 10% owner-occupied. The complex's owner struggles, and the whole neighborhood goes up for sale in a foreclosure auction. The new owners dissolve the condo association, since they own all of the rentals, or 90% of the homes in the complex. This gives the owners permission to sell the entire complex at once, including what used to be condos. Your proceeds from having your home sold out from under you: $33,000. You still owe the rest of your mortgage, but have nowhere to live. Condo owners in Reading, Pennsylvania experienced this nightmare recently, and there is no legal way out for them."
Wow. That's bizarre.  I think there are some missing pieces in this story.  If a condo association is dissolved it would create a tenancy in common.  I'm trying to figure out how owners of 90% of the interests in a tenancy in common can sell 100% of the property. Thanks to Mystery Reader for the pointer.

1 comment:

Anonymous said...

Evan: Not sure I understand your comment. There was a tenancy in common irrespective of the existence of the condo corporation wasn't there? The condo did not own property, the individual condo owners owned 100% of some of the real property and had an undivided % interest in the remainder of the property. This was true whether or not a condo corporation exists.

I suspect that part of the dissolution process is selling off all the condos.

The part about 90% selling 100% is no different than 51% of those voting being able to impose harsh new/amended restrictions on 100% of the property in HOA-burdened subdivisions. That happens all the time.