In case you haven’t noticed, it rains in Portland and the rest of the Northwest. Today is a pleasant exception. We spend many months each year with wind and rain driving into the sides of our homes. Hopefully the moisture stays outside. Today’s front-page Oregonian article chronicles both newer construction single family and condos where the water has found its way inside. The headline reads “Building Defects Homemaker’s Dreams.” The entire article covers more than two full pages. The author, will be having a live webcast on Monday the 20th at 1PM on www.oregonlive.com
We’re seeing more and more litigation with condominiums built in the late 90s and later. I sold four units in the Riverpark Condominiums following a settlement ($5.2 million according to the article) with the builder that had prevented owners from selling for nearly a year. About the only way to sell a condo that is in litigation (usually the homeowner’s association against the builder) is a cash deal. Banks will not lend knowing that the owner could get stuck with a large repair bill if the litigation is unsuccessful. There is a distinct lack of curb appeal when your building is surrounded by scaffolding and wrapped in plastic!
We just worked with a buyer that purchased a unit in the Pearl District where the HOA was in negotiations with the builder for construction defects. The buyer did enough research, talked to their attorney and felt that a settlement is eminent so they paid cash for the unit. The price of the unit certainly reflected the uncertainty in the settlement. We’d hoped that it would settle while in escrow and they would have locked a great price in but the settlement is still outstanding but they feel that even in a worst case situation where settlement fails and they get stuck with an assessment, they’ll still be sitting on equity. Hopefully it will work as planned!