Question: We have a homeowner's association with nine units. There is a rule in the condo docs that says only 30 percent of the units can be leased. Two are now leased -- 22 percent. It is my belief that we should round that number up to three units. The Board believes that we should round down to two. Which is the better choice?

Answer: The best choice is to check with lenders and see what latest underwriting guidelines say.

Lenders and "secondary" lenders (the companies that buy mortgages) have said that when a certain percentage of units in a condo project are rentals, say 40 percent, they may not want to make additional loans. To them, such projects represent more risk than a property which is all or largely owner-occupied. The loans that are made often have higher rates than typical homeowner financing and tougher requirements. The result is that with "too many" rental units in a project, the ability of all owners to sell and refinance can be impacted and prices can decline because the units will be harder to finance.

The catch is that some loan sources may see 40 percent as a cut-off point, while others have different standards. Lenders may also want to look at other factors, such as whether the developer has retained any units and how long the property owners have been in control.

Question: We recently purchased a home with the help of a home inspector. He found a few things -- the water heater needed to be strapped to the wall, rain gutters cleaned, garage door fixed and air conditioning serviced.

But after we moved in we found problems that were not reported: The venting for the water heater was red tagged by the gas company as an allegedly illegal set from a stove hood, plumbing pipes propped up by a brick, and which had obviously been there for awhile, which the gas company said it was a wonder that no one had died of carbon monoxide poisoning! Also he did not report the very large cabinets in the kitchen were hanging half off the walls, a twisted beam support holding up the back porch over hang, a two-foot hole in the wall behind the toilet in plain sight. What action can we take against the home inspector?

Answer: Did you physically walk through this property prior to purchase? Did you have the assistance of a buyer broker? Was the property appraised by someone who went through each room? Did no one notice the problems you list?

If a two-foot hole is "in plain sight," did you not see it? Did you not notice the kitchen cabinets? If yes, did you ask the home inspector about these items? Did the gas company turn off the gas if the system was so dangerous?

Have a building inspector from the local government immediately look at the property.

Question: Does a broker have a right to take my house off the market even if I didn't sign a contract to sell it?

My broker got me over the asking price but I didn't decide to accept the offer. She just assumed I would sell because the price was for more than we asked, so she withdrew it from the market. I questioned her about it an now its back on the market. Can I withdraw my agreement with her for doing that without telling me first?

Answer: You listed your home for sale under given terms and conditions. One of those terms was the sale price. The broker found a buyer who offered more than was sought under the listing and you turned down the offer.

It may be that the offer had requirements not outlined in the listing agreement and thus you rejected it. Alternatively, if the offer met all listing agreement terms and the buyer was ready, able and willing to purchase you may owe the broker a full commission for her work.

Certainly if the listing expired the broker would stop selling the property. As well, in many areas of the country, after an offer is accepted the property is regarded as "under contract" but not "sold" until title actually changes hands. Thus the property is not "withdrawn" from the market, instead the public is on notice that the property is under contract but that other offers may be considered. It's possible that when listings were updated a code was entered by mistake.

Given that your broker obtained a high price for the property, I'd be elated to have her work for me.

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Published: May 7, 2004

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