E.B. from Litchfield County, Connecticut writes:
Dear Mister Condo,
I am trying to sell my condo in a complex that just recently had a second assessment levied. I have been told that a potential buyer would now be unable to purchase my unit with a conventional mortgage. Is our complex now ineligible for a conventional, non-FHA mortgage buyer because of the simultaneous assessments?
Mister Condo replies:
E.B., the short answer is “it depends”. Unfortunately, that is not going to help you too much while you are trying to attract a purchaser who may require a mortgage, either FHA-approved or other. Levied assessments against individual condo units act as liens until they are paid. A potential buyer may face a mortgage hurdle if a lien shows on the property. I assume you are looking to transfer this assessment to the new buyer. Otherwise, you could simply pay off the assessment and there would be no issue. Depending on the size of the assessments you may wish to simply pay off one or both of them and remove the encumbrance to the mortgage. If there is enough money left after the sale, you could them reimburse yourself for the assessment payoff. However, if there is a delinquency (much more common these days I’m afraid), then you may not be able to pay off the assessments and find that no bank will mortgage the property with two assessments. If that is the case, you may be better off holding the property until the assessments are paid or market conditions improve. Good luck!