Mandatory Form

Nevada has a mandatory form (required of all sellers) known as the Sellers Real Property Disclosure that asks the question: has your property ever been subject to a claim or lawsuit filed regarding construction defects? In a perfect world, everyone answers honestly and we all go about our business. However, when you live in a property governed by a homeowners association this tends to complicate the issue. While you may have never filed any such claims on your personal residence, the association may have. This can and does cause problems with financing particularly when dealing with condos and town homes where a homeowners association has an ongoing lawsuit against the developer concerning construction defects. These defects can affect common areas like block walls and can also be more devastating like defecting plumbing in units or mold issues in units. Whatever the case, if you are trying to obtain government financing on such a unit (FHA or VA loans) or even if you are trying to purchase a single family residence where the governing HOA (homeowners association) is involved in a law suit; you may have problems obtaining financing. Some of these issues can be resolved by a statement from the attorneys detailing the scope of the defect issues and whether or not they directly involve the unit in question. However, we have discovered instances where we must go to an outside private lender in order to obtain financing on units until such time as the suits are settled. Once again, Due Diligence on the part of buyers and agents is important!