renovation loans and foreclosure

3 Replies

Hello all. I'm hoping to get some advice on a matter I'm having with the board of my condo complex.

Briefly, they negotiated a $4.2M renovation loan whereby the collateral is the monthly assessments collected from the owners to pay back the loan. Though it wasn't argued that work didn't need to be done on the 8 buildings, these are repairs which have been known for as far back as the building of the complex.

Against everyone's objection to their proposed repayment plan being unaffordable they pushed through loan. Out of 100 owners, to date 3 have been foreclosed and 40 have paid their share owed. I'm underwater on my mtg, have been denied a HELOC, been denied reactivation of a dormant HELOC and have medical bills that I'd like to pay so I can make good on my obligation. Basically they put me in this position and won't work with me.

Yes, the declaration allows the board to negotiate loans on our behalf and yes it allows them to enter such transactions. But when we voice our objection and they aren't willing to work with us I feel they've breached their fiduciary duty per WA State's RCWs.

Am I wrong in wanting to consult an attorney to take action against them? I know per the declaration they're indemnified from litigation but I'm seeing this as more of a civil matter against them individually. I can give more info to give a better explanation if requested.

Thank you for whatever you can suggest.


If it were me I would request to see the minutes of all meetings involved in loan if they spoke to an attorney about the loan chases are it was done legal and properly and fighting them on it might be a waste of money.  Your best bet may be to meet with them and try to come up with a payment plan which gets you caught up and waves any late fees so the hole doesn't get any bigger.  Hope this helps. good luck! 

Thanks, Cameron, a voice of reason in a sea of confusion.

I did meet with an attorney to get a legal opinion and though he too has reservations of how the board went about doing things the Declaration trumps all and gives free reign to do as they please so long as they don't (technically) break the law. From his perspective it is a lose lose situation for all if the board doesn't work with me.

He could help me by submitting a payment plan but since they've rejected everything I've already proposed I don't feel that's worth my money. Just have to rearrange how I go about handling my finances.

I need a  tee shirt that says Though I'm Not Dead I'm Also Not Stronger.

Sorry to hear about it, Cameron....

While it is highly controversial, many of the major US corporations (and one Republican front-runner, I believe) have used tools like efficient breach, bankruptcy, deed in lieu of foreclosure and short sales.... Medical bills I understand are the number one reason for bankruptcy in the US.

It depends so much on the facts, your goals, and the prospects, and your plans... If you plan to stay there and want to stay there, I suggest you try and find a way to pay or let the board know that it is either your payment plan or one of the options above if they force your hand. Heck, you could get the final word if you run for the board and get elected or start getting active in the meetings.

Or if it just impossible to pay or makes no economic sense at all, maybe the same person who advised you on the condo issue or someone in another area of law can help you see the repurcussions in your state of a strategic default or some other option of getting out of the unit. I would think a close market analysis with a realtor is  first step--to discuss the actual market (post renovation) and the amount owed (the assessment should likely be paid at sale, or perhaps assumed depending on the terms).. Maybe you could sell it and come out ok.... With the other options, of course, credit is an issue as are deficiency judgments and taxes...

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