You can be forced to sell your condo through this Arizona law.
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Imagine you’re living in a condo, and one day you get a letter saying you’ll have to move. You don’t get to decide who you sell to, what the condo sells for, or the closing date. It seems hard to believe, but it happens. You don’t even need to be behind on your mortgage payments.
The law that allows this is called “termination of condominium.” A person or entity that controls at least 80% of the HOA votes can legally force sales of the remaining condos. Think about it like a hostile takeover in business. Investors leverage this law to turn condo communities into rental units or other investment opportunities.
This typically happens when investors quietly acquire more and more condos in a community. The fair market value of the condo is determined by an independent appraiser selected by the HOA. You can hire your own appraiser, and if there’s a 5% or more difference in the values, you can appeal the price. You will still have to sell, though.
"Once an investor gets 80% of the community, there’s not much you can do to stop it."
Reach out to us if this happens, and we can make sure you’re being treated fairly and that the process is legal. If it is being done illegally, we could get the sale canceled.
Sadly, once an investor gets 80% of the community, there’s not much you can do to stop it, but you can plan for it. When you’re buying a condo, ask about the HOA regulations and the ratio of individual owners to investors. Of course, the best recommendation is to simply buy a single-family home or townhome since the ownership is different.
Again, this has been happening more and more in Arizona because of the market conditions, so it’s good to be aware of it. If you have any questions about this or anything else real estate-related, reach out to us. We’d love to help you out.