San Diego Real Estate Voice

Do HOA Board of Directors have a Fiduciary to the Homeowners they Represent ?

You know if you live long enough you will come close to believing you have seen it all. I represent a Seller in a condominium subdivision and 2 days ago, the Seller was to receive an FHA offer. Over a decade ago, I worked with a lender to get the complex on the approved list for FHA/VA financing. For the last couple years I have been reminding the management company that the old approvals were going to disappear and a new application had to completed. 

I was informed yesterday when I checked into this that the Board of Directors made a decision not to have the subdivision approved for FHA/VA financing. It was felt that this type of financing was no longer needed or desirable. One of the BOD members is said to be a real estate agent ( told to me by the property manager) and this person suggested to the other board members this type of financing did not benefit the homeowners.

Instead of helping owners maximize the number of qualified buyers that would like to purchase their home there, this action may cut the buyer pool significantly over time and may even have the consequence of causing a decline in value buy limiting the number of qualified Buyers.

I have to wonder how people can become so misinformed and how unfounded opinions that can affect others so negatively can be allowed to take place. The limiting decision not to have the subdivision re-approved to me certainly would have a negative effect when owners decide to sell. With a self limiting Buyer pool, isn't there some collateral damage to values and if that is true, don't the BOD members have a Fiduciary to protect the homeowners property values to the extent they can. In other words, at least do no harm.

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Comment balloon 35 commentsWilliam Johnson • February 12 2014 08:52AM
Do HOA Board of Directors have a Fiduciary to the Homeowners they…
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