More than 20% of currently listed loft buildings in the Downtown Los Angeles area are currently or recently engaged in some kind of lawsuit or litigation. Alta lofts homeowners association recently disclosed that it may soon be embroiled in litigation in the near future.
Because these claims and disclosures are written by lawyers, and you might say “salesmen” for the law firms, they are careful to disclose the responsibilities of the homeowner’s association representatives to investigate and make repairs, but perhaps the letter neglects to include the responsibility to weigh the pros and cons of claims and litigation, including such drawbacks as inspection costs, legal and potential litigation costs, cost of possible reduced home values for up to several years, potential delays in selling properties, possible lending and refinancing issues and possible (albeit rare) loss or counter suits from developers, as well as other unexpected costs that could arise.
Also embroiled in this type of HOA vs developer legal action is the popular Barker Block lofts. Buyers often have difficulty getting a copy of the full litigation documentation, which also can cause some potential home buyers to get cold feet and place downward pressure on prices during the lawsuit.
There are many issues surrounding these common claims and lawsuits by homeowners associations against builder developers. Potential buyers and sellers should consult with attorneys to understand the lawsuits, and should consult with Downtown specialist realtors to learn the practical effects of litigation on the real estate market and home values of the affected properties.
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