In California, people sue people for all kinds of reasons and real estate is no exception. Since I’m not an attorney and I don’t know every detail of the law, I’m just going to say that in California, developers are liable for construction defects for up to 10 years after completing construction. For downtown San Diego condos, this means that the HOA will undoubtedly sue the developer for anything and everything – cracks in the sidewalk, leaky planters, windows that were installed backwards, pools that need resurfacing…or any other issue.
Whether the problems are serious or not, one of the main issues is that prospective buyers might have a hard time getting financing. If the property is not under litigation and it’s just an SB 800, then it shouldn’t be a problem. However, if the building has moved beyond the SB 800 and is under litigation, it drastically limits the buyers financing options.
For qualified buyers, they can get financing though if they put down 20% down for primary residences (25% for second homes). There are some other restrictions, but it’s not as difficult as some people may think. Rates aren’t too much higher, but you are limited to a maximum loan amount of $417K (in San Diego). The key is finding a lender who knows what they’re doing and ideally, has done it before.
If you’re thinking about buying downtown, make sure you’re working with a realtor who knows what’s going on and whether there’s litigation in the building(s) you’re interested in, or not. Hopefully he or she will be able to set you up with a capable lender who can hep you – I happen to have a list of all buildings under litigation and I also happen to know several lenders who can lend on them. I can also help save you more money than you might think.
If you want to get a free list of downtown condo buildings that are currently in litigation, please contact Denny Oh at [email protected] or 858-243-2092.