I had a condo under contract in Jupiter and the bank discovered a lawsuit (public record) against the condo association a few days prior to closing. I contacted the condo association manger via email and requested info required by the bank. The manager replied via email "No, it’s a pending lawsuit, nothing can be discussed." My seller was not aware of this lawsuit because it was also never discussed in the board meeting minutes. This lawsuit was effectively hidden from owners!
If this were a cash transaction, the buyer would have never discovered this lawsuit. If the Plaintiff wins this case, the condo owners could be liable for any damages not covered by their insurance policy. If this was not disclosed to a buyer, they could sue the seller for failure to disclose. The seller could argue that it was never discussed in board meetings.
This was like herding cats, but we eventually got all the documents from the condo associations attorney and I'm sure she charged a hefty fee for her time.
If this info was on the condo associations website, it would be transparent to condo owners, buyers, realtors and lenders. To limit the liability of the condo association and management company, they could add an acknowledgement on the buyers application (for association approval) that the buyer has reviewed all documents on the community website www.____.com.
If the lender required documents were on-line, the attorney would not need to spend hours every time a condo goes under contract.
