Imagine that you’ve recently purchased a condo for $100,000. The complex where it’s located is about 90% rented, and 10% owner-occupied. The complex’s owner struggles, and the whole neighborhood goes up for sale in a foreclosure auction. The new owners dissolve the condo association, since they own all of the rentals, or 90% of the homes in the complex. This gives the owners permission to sell the entire complex at once, including what used to be condos. Your proceeds from having your home sold out from under you: $33,000. You still owe the rest of your mortgage, but have nowhere to live. Condo owners in Reading, Pennsylvania experienced this nightmare recently, and there is no legal way out for them.
It was a shock to the owners, who thought that they, you know, owned their homes. The huge discrepancy between what homeowners received from the sale and the appraised value of their homes in the complex may be due to the different ways that a condominium is valued compared to a similarly sized unit in an apartment building. An individual condo is different from one out of 108 apartments. But only 1/3 the value? “[The company] really screwed her on this by not offering full market value with a legal industry appraisal and credible comparable condos,” the appraiser one homeowner hired told AOL Real Estate.
Former homeowners have retained lawyers, contacted their government representatives, and have even contacted the media. Nothing changes how this situation was all 100% legal. Very rare, yes, and just a little bit evil, but entirely legal.
This Is Crazy’: Company Snatches Condos From Owners [AOL] (Thanks, Misteebluz!)