A. Fannie Mae and Freddie Mac have new rules that apply to anyone who is buying a condominium. It requires additional coverage over what associations commonly provide.

The insurance agent looks to the CC&Rs for guidance as that tells what coverage the association will provide. This is not always true but commonly the insurance policy may just cover the exterior structural components, walls and roof. This is “bare walls” coverage. In the event of a total loss of your home due to fire, the association’s policy would rebuild the structure but leave you with an empty shell.
It would be up to you to pay for the plumbing fixtures, all the cabinets, interior doors, kitchen appliances, furnace, light fixtures, wall coverings, and carpet or wood or stone flooring, and everything in the bathrooms.

In addition, there may have been improvements beyond what the developer provided when your unit was built. These are known as “improvements and betterments” that are additions, remodel improvements and other things that people have done to their units to make them nicer.

Fannie Mae and Freddie Mac have finally realized this gap in coverage and have moved to close it. The new requirement is that if the HOA’s master policy doesn’t provide sufficient coverage, the borrower must provide what is known as an HO-6 policy.

That’s OK because you would want that coverage too. Note that there are two levels of coverage. The first would just include rebuilding to “original specifications,” that is the way the builder built it. Coverage for the “improvements and betterments” has to be included too.
Here’s the stupid part. Fannie and Freddie require coverage equal to 20% of the appraised value of the home. It should have been written to include 20% of the value of the above-ground improvements. You have to pay for insuring 20% of the value of the land that is included in the total appraised value. Even worse, the cost of adding interior structure coverage to your personal property policy is very expensive, as you found out.

The best solution is almost surely to have the HOA increase its coverage to meet the new requirement. That will likely require a change to your CC&Rs, something you cannot initiate until you are an owner. In the meantime, they gave you the CC&Rs so see what it says. Then get your HOA’s master insurance policy and find out exactly what it covers. It will probably not be spelled out so you will probably have to call the HOA’s insurance agent to find out the specific coverage.
Then sit down with your insurance agent to make sure your personal property assures that you are adequately insured and that you meet this new requirement.

“Every time Mary Baker tries to take her cat out, there’s drama.

“This is impossible,” said Baker, as her leashed cat runs inside through a dog door. “She’s crying too.”

Despite her cat’s typical defiant behavior, a leash is a requirement at her condo — strange as it may seem to some.

“Cannot be outside without a leash,” said Mary.

“They wanted us to put the cat on the leash, and that’s what I’m thinking you gotta be kidding me,” said Tom Tiedje, Mary’s Landlord.

This week the condo association in this Stockton community listened to several complaints about stray dogs and cats. They decided Baker’s cat must obey the same rules as dogs.

“I’m frustrated because she’s a cat a cat, come on. She’s gonna do what she wants,” said Mary.

Baker says the doggie door is the problem. Her cat, Nefer, follows her dog outside.

“Her and the dog chase each other out here. They play,” said Mary.

Some may see this fight as catty human behavior, but neighbors are fed up with Nefer’s constant visits to the community’s open space, and stepping in droppings is no fun, so putting the cat on the leash doesn’t seem so ridiculous.

“If it bothered everyone around me and aggravated all my neighbors, I’d probably do it or I’d get rid of the damn cat,” said Doug Durham, a neighbor.

“They wanna come out and not have to worry about stepping in leftovers, but I think a cat on a leash idea is impractical. It goes against nature,” said Tom.

The condo rules and regulations contract says dogs must not be on a leash, but there’s no mention anywhere in the guidelines about cats.

A condo association representative says the association is in the process of trapping all stray dogs and cats. They also say the leash rule applies to both dogs and cats.

This project is expected to lead a wave of Condominium Terminations, resulting in mass short sales of failed condominium conversions, reversion to apartment buildings, and the debut of a new legal instrument, the Plan of Termination.

Sunset Lake Villas is majority owned by Anthony Galeotafiore, Managing Member of AJG Realty LLC development group of Bethpage, New York. Sree Reddy, Esq., LLM, of the Miami law firm Roth, Reddy PA, drafted the Plan of Termination and represented the Developer at today’s proceedings.

Condo Termination was “the only way out,” said Galeotafiore. “After all of the units we sold fell into foreclosure, all of the unit owners moved away or rented units without paying HOA dues. Nobody is financing condos, but apartment buildings are bankable.”

Condo Terminators provided specialty business advice to the Developer and transactional advisory services to his council and accepts projects for these services throughout the state of Florida.

“Condo Termination transactions are the only way to resolve Florida’s real-estate slump and protect the rights of homeowners, banks and the value of our tax base,” says Condo Terminators President Grant Stern. “The Condo Termination law is meant to cut through the tangle of lawsuits and provide fair resolution to the parties of interest, outside of court.”

For questions and further information, please visit http://www.condoterminators.com or contact Grant Stern directly at 305.219.0326 or info@condoterminators.com or Anthony Galeotafiore, President of AJG Capital of Bethpage, NY, at 516-933-3507 or agallo@ajgcapitalresources.com

This press release was issued through eReleases(R). For more information, visit eReleases Press Release Distribution at http://www.ereleases.com.

Read more: http://www.sacbee.com/2010/06/10/2812649/condo-terminators-completes-floridas.html#ixzz0qUSmW3kC

In January 2006, first-time homebuyer Lavender Lee was overjoyed to buy a $155,000 condo in Folsom’s newly remodeled Waterford Place.

Then, within months, she discovered her neighbors talking about water and mold damage.

“I was devastated,” she said. “I couldn’t think of any way to get out of it.”

Wednesday, four years later, Lee found her exit. A Sacramento arbitrator freed her from her mortgage, part of a $5 million ruling against a Bay Area developer alleged to have sold water-damaged condos to Lee and 23 others in 2006.

Arbitrator Ernest A. Long ordered Redwood City-based Prometheus Real Estate Group to reimburse Lee, too, for $20,300 in mortgage payments already made. In all, Long ordered the developer to repay 24 buyers $1.7 million for mortgage payments made since 2006 and take over $3 million in payments they still owe on Waterford condos.

Folsom attorney John Miller, Jr., who represented buyers in the case, said many moved out within months of closing escrow and were afraid to rent their units because of potential liability over water and mold conditions. Several lost their condos to foreclosure. Values of all the units fell sharply, Miller said.

The binding arbitration process, agreed to by Miller and Prometheus as an alternative to court, provides a rare look at mold and water damage cases in which large legal settlements usually remain confidential. The order also highlights the troubled aftermath of a condo conversion craze that swept Sacramento just as the housing market began to collapse in 2006.

Waterford’s owners sold about 40 condos before suspending sales in May 2006. The clean, fresh-painted and well-landscaped community near Folsom Premium Outlets has since been almost entirely tenant-focused. Waterford renters aren’t affected by Long’s ruling, Miller said Wednesday.

“At least there is some remedy for the public,” said Betsy Sullivan, who with her husband, Michael, will get back $202,000 they paid for a Waterford condo in May 2006. The two helped lead organizing that started the case. “Just because they’re builders and developers doesn’t mean they can cheat people,” she said.

Long, in an 83-page document issued under auspices of Sacramento Superior Court, ruled that Prometheus “negligently failed to disclose and fraudulently concealed information” from buyers about water damage at the 324-unit condo conversion project.

Prometheus bought the former Lakeridge Apartments in early 2005 and did a $9 million upgrade before marketing condos. But Long ruled that previous water intrusion conditions were painted over. That prevented “reasonable visual inspection,” he stated, and kept buyers from knowing the true condition of their units.

Sacramento-based attorneys for Prometheus did not return two telephone calls Wednesday. Nor did company representatives in Redwood City. But Long’s ruling noted arguments by Prometheus that “it cannot be held liable for fraud because it did not know that the conditions affecting the Lakeridge Apartments were not cured by the ($9 million) renovation.”

Miller warned buyers that it might take time to receive the money. He said Prometheus has 10 days in which to challenge the arbitrator’s ruling or ask that it be overturned.

Condo buyer Gaspar Silanos said Wednesday that Waterford “was the third and last condo I’ll ever own. Now I’d like to buy a house without a homeowners association.”

Call The Bee’s Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/homefront

Read more: http://www.sacbee.com/2010/06/10/2811712/folsom-condo-buyers-win-ruling.html#ixzz0qUQbo1ma

Condominium and home owners associations desperate for money are experimenting with a tactic called “reverse foreclosure” to force banks to pay association fees.

The process works like this: When a borrower stops paying the mortgage, banks often delay taking the property into foreclosure. When banks delay, neither the former home owner nor the bank is paying association fees.

To remedy this, the association files its own foreclosure notice, taking over the title. The association can’t sell the property because of the bank’s lien on it. So the association goes to court, renounces the property and asks the judge to give the title back to the bank.

When the judge does so, the bank has to pay the fees. Experts say this technique is becoming very popular in parts of the country where there are a lot of foreclosed condos.

Source: Miami Herald, Rachael Lee Coleman (03/07/2010)

McKeon condomiums typically have a #1 unit in front which is usually a 2 bedroom 1 bath unit with a living room and kitchen.  The #2 & #3 units are usually kitchen and living room downstairs and two bedrooms and a bath upstairs. The #4 unit is usually the rear unit and has a porch and pverlooks the alley ways of the complex.  You usually have 2 two car garages, each garage being shared by two units with storage units and overheard storage for each unit as well.

The issues I have found in my experience with this style condominium is:

1. 1.  Unit #2 & #3’s toilet upstairs usually sits on top of #1 & #4 overheard storage units SO, these toilets tend to leak and the damage is above another units storage.  HOA’s should make an effort to assign these spaces based on the unit is would effect, it may not be smooth numbering but would keep each units responsibility more intact.
2. Buyers should always look at the HOA docs and meeting agendas.  Some complexes do not cover the inside of the garage which leaves the responsibility to the two unit owners for interior wall damage and garage door openers and sometimes the garage doors themselves.

We have seen some great things done with the Mckeon interiors such as granite countertops, remodeled kitchens and more.  Here are a few examples:

You can find this style condominium mostly in Citrus Heights, Sacramento and surrounding areas.  Elk Grove has a small complex off of El Mirador off of Elk Grove Florin Road. 

As always if you are looking for a condominium in the Sacramento market, contact SacramentoCondos.com at info@SacramentoCondos .com or through one of our links on the front page.

Bruce Slaton

SacramentoCondos.com

These condominiums built in Elk Grove by Pacific West were built approximately in 2006 and feature four floor plans ranging from a 1 bedroom 1 bath 1185 square foot unit to the largest unit the 2 bedroom 2 bath + loft unit 1728 square feet model.

The models are as follows:

     Residence One

     1 Bedroom 1 Bath with Loft  1 Car Attached Garage             1185 Sq Feet

     Residence Two

     2 Bedroom 2 Bath (Ground Floor) 2 Car Tandem Garage  1314 Sq Ft

     Residence Three

     2 Bedroom 2 Bath w/Loft  2 Car Attached Garage                1519 Sq Ft

     Residence Four

     2 Bedroom 2 Bath w/Loft  2 Car Attached Garage                1728 Sq Ft

I personally feel Pacific West is one of the best builders in the Sacramento Region for condominiums, between their agressive growth with Syrah in Natomas to projects in Folsom, Roseville and West Sacramento, they completed projects in the region that condominium buyers wanted. 

Some of the standard features in most of their complexes were inside laundry areas, attached direct access garages and granite countertops standard in most of not all of thier plans.  Jasmine has the added benefit of also being a secure gated complex surrounded by residential homes, a major plus years later in resale values in my opinion.

Keep in mind these units sold between 259,900 and 339,900 and now are selling for the low to mid 100’s, I personally believe they are a great investment if you can get into one.

Financing update (12/5/09):  FHA and Conventional financing may not be possible in this complex due to late HOA fees ratios and occupancy ratios, make sure to ask your lender and/or agent (or if you dont have an agent email us at info@SacramentoCondos.com) and know if the program you are using will work in this complex.

And being in Elk Grove, this complex is in the Elk Grove Unified School Disctrict.

Thank you for allowing us to bring you Jasmine in Elk Grove and we look forward to adding more complexes as quickly as possible.  Please feel free to comment if you have updates for this complex or want to share your experience living here.

Bruce Slaton Lic # 01305148

SacramentoCondos.com

Bruce Slaton Lic # 01305148

SacramentoCondos.com