K.W. from New London County, Connecticut writes:
Dear Mister Condo,
My daughter owns a condo in a small development, there is only one building with 4 units which she bought less than 2 years ago. Two other units have also recently sold within the last year. My daughter recently received a letter from a Real Estate Agent that the land the condo sits on is currently for sale. How can it be that these units were able to be sold and purchased without the condo association owning the land? In researching this matter, we have also uncovered the fact that the city has a lien on the property for unpaid taxes for the last 2 years. Who can we hold responsible for this unfortunate event and how do we rectify it? It’s obvious that the previous President (who is the owner of one of the units that just sold) lied on the Condo Questionnaire that was required by the mortgage company, I never would have been able to get a mortgage if they knew that the land wasn’t owned. Apparently, the development group had taken out a rather large mortgage on the project and never fully repaid it so that is why a mortgage company owns the land. Would this be covered under my Title Insurance??? My closing attorney does not seem to think so! Please help if you can!!!!
Mister Condo replies:
K.W., I am sorry that your daughter has found herself in this predicament. I am not an attorney and offer no legal advice in this column. What you have described is certainly a legal matter at this point. It would be a good idea to speak with all of the owners in the development to see if they have all received the same notice. It is certainly possible that during the transition period of development (the time when the developer still owns the land and has not yet turned over control of the association to its own Board) that the developer has not satisfied all of the debt associated with the condominium. If that is the case, and the developer has defaulted on a mortgage, the bank may exercise its right to foreclose on the land. Like I said, this is now a legal matter best handled by an attorney for the association. Ideally, the association would purchase the land and all would be well. However, this chain of events will need to be facilitated by the association (comprised of the small group of owners, including your daughter). An attorney could best advise them of their rights and how to protect their homes. There are many attorneys that specialize in this special period of a condominium’s early days, known as developer transition. You can find many Connecticut attorneys who can advise you at the Connecticut Chapter of the Community Associations Institute. Visit the directory of members at their website at https://www.caict.org/page/Directory. All the best!