Condo Media - October 2010 - (Page 18)

ASKED & ANSWERED Under the Age Limit Buying in Age-Restricted Communities Q A QUESTION: If an ineligible (younger than 55) purchaser buys a unit in an age-restricted condominium community, what happens to the buyer, the seller and the community? ANSWER: We’re assuming that: you’re talking about an 80-20 community in which no more than 20 percent off the occupants can be younger than 55; and this new owner pushes the community above that 20 percent cap. The community association has good reason to be concerned, according to Ellen Shapiro, a partner in the Boston and Providence, R.I. law firm Goodman, Shapiro & Lombardi. If the community no longer meets the requirements for an “over-55” designation, it would lose its exemption from the age-related anti-discrimination provisions of the Fair Housing Act and could no longer bar residents based on their age. That would mean owners couldn’t refuse to sell their units to families with children and the community could morph into something other than the “seniors only” housing other residents thought they were buying. The federal law, administered by the Department of Housing and Urban Development (HUD), contains a “good faith” exception, under which communities will not lose their Fair Housing exemption if they can demonstrate that they relied “in good faith” on the documentation buyers presented to verify their age. But few over-55 communities in New England, if any, have procedures for verifying the eligibility of buyers before a purchase. Once the board has identified the problem, Shapiro says, it has little choice other than to insist that the ineligible owner either sell the unit or rent it to an eligible occupant. And the board should take the buyer to court, if necessary, to enforce the community’s age restrictions, Shapiro advises. “If you [look the other way],” she warns, “you run the risk that the exception will swallow the rule.” Others will discover the lapse “and the next thing you know, an owner’s girlfriend will want to move in with her two children.” This hard line becomes more difficult to draw, Shapiro acknowledges, when the ineligible buyer is close to 55. “Let’s be realistic,” she says. “If the buyer is 54, by the time you get through the court process, he or she will be at least 55” and the issue will be moot. “These situations are fact-driven,” Shapiro says. The closer the buyer is to 55, the less urgency there is about insisting on a remedy; the younger the buyer, the greater the cause for concern. As for the impact on others involved in the transaction the buyer, the seller and the real estate broker, if there was one, will almost certainly end up in a court battle over who should have disclosed what to whom. The buyer who is unable to live in the unit he or she bought will no doubt argue that the seller and broker failed to disclose the age restriction. But someone will also no doubt point out that age-restricted communities typically promote that feature; they don’t hide it. So it wouldn’t have required much due diligence (reading the marketing material or noticing the driveway sign: “Welcome to Happy Hollows – An Over-55 Community”) for the buyer to have identified the age issue before completing the purchase. Fortunately, the association should not have to be involved in this dispute. That doesn’t mean the association won’t be sued, only that (unless the board or manager assured the buyer that the age issue wouldn’t be a problem), the association shouldn’t have any liability. The association’s sole concern should be protecting the community’s over-55 status. Toward that end, Shapiro says, the boards in age-restricted communities should be reminded of the HUD rule requiring them to conduct a census every two years to verify the age eligibility of residents. That periodic audit won’t prevent a situation like this one, but it will enable the board to monitor compliance and take immediate steps to restore the age balance if that turns out to be necessary. CM 18 CONDO MEDIA • OCTOBER 2010

Table of Contents for the Digital Edition of Condo Media - October 2010

Condo Media - October 2010
From the CED’s Desk
President’s Message
CAI News
CAI Regional News
Asked & Answered
Homeowner’s Corner
CAI-NE Annual Conference & Expo
Vendor Spotlight
Board Member Insight
Industry Perspective
Advertisers Index
Classified Service Directory
Statement of Ownership

Condo Media - October 2010