Attorney Offers Advice for Condo Buyers

New planned communities, mixed-use developments and condominiums are particularly hard to sell in the current economy where the prices of units in so many developments have fallen through the floor.

The Wall Street Journal interviewed Roger Winston, a real estate attorney at Ballard Spahr Andrews and Ingersoll, at his office in Bethesda, Md., about how buyers of these kinds of units can protect themselves.

Here are some key excerpts from the conversation:

Question: If the price has fallen, can a contract be renegotiated?
Winston: “In this economic environment, the builder wants you to complete the purchase; he doesn't want another unit to sell. … It's not just the builder making the decision, however; the [builder's] lender must also agree to release the unit at a lower price. If the builder is able to renegotiate with the lender, it's more likely he'll be able to renegotiate with the purchaser.”

Question: What contingencies can a buyer put into his contract to protect himself?
Winston: “You could put in a contingency that if you lose your job or your wages are cut before settlement, you could get out ... or if you can't get financing … or if the home isn't completed by a certain date.”

Question: What else should buyers consider?
Winston: “It's a good idea to ask how many units have been sold, because when the building is under construction, the builder pays the condo fees for the unsold units; when he leaves, the owners are responsible for 100 percent of the costs of maintaining the building.”

Source: The Wall Street Journal, June Fletcher (04/17/2009)