condominium, condominium conversion, developer, lender, foreclosure, sales contract, purchaser rights
The late 1960s and early 1970s have witnessed an unprecedented boom in both construction and conversion condominiums. The inflationary spiral of the 1970s caused many developers of partially completed rental projects to seek substantial loan increases to cover cost overruns. Such loan increases often could not be justified by rental income projections. Accordingly, many developers and lenders turned to condominium conversions as a panacea for project cost overruns. However, with a shortage of end loan money, developers and lenders were left with unsold "inventory," increasing in cost with each passing day. Indeed, many developers of condominium units found themselves in severe financial difficulties, with bankruptcy imminent for some. If the economy continues in its present state, foreclosures on some condominium projects are inevitable. A prospective condominium purchaser would do well to ask:What rights does a holder of a sales contract on a condominium unit have in the event of a foreclosure by the construction lender on the entire project? It might come as a rude shock for purchasers to learn that the law provides them with little protection-if any-once they have waived most of their rights in a condominium sales contract. This article will briefly survey some typical provisions of condominium sales contracts, and examine various principles of equity for possible application to condominium foreclosures.
Jeffry R. Dwyer,
Protecting the Rights of Purchasers of Condominium Units,
3 Fordham Urb. L.J. 475
Available at: https://ir.lawnet.fordham.edu/ulj/vol3/iss3/3