Is it legal for a Condominium Association Board to write in their By-laws that they have First Right of Refusal for a sale?
Question Details:
Owner is selling their own unit. Also, is it legal for them to say that FHA loans are not acceptable to sell your unit?
Yes, they can have the right of first refusal, but they have to be careful exercising it, or they could face liability for scuttling a sale.
A ban on FHA loans is more questionable; if there's a reasonable and rational basis for it, a court might say it's ok, but it certainly raises questions; problem is, to pursue a declaratory action against the board to get a yay or a nay is potentially cost-prohibitive.
If the first refusal right was included in the original by-laws, then it's probably legal, because everyone bought their unit with notice of that (as far as the law is concerned, it's your own fault if you didn't take the time to read through the large stack of paper involved in the closing, which had those by-laws in there, somewhere). Adding that now shouldn't be possible, without satisfying the amendment process, if at all.
I'd be surprised to learn that the FHA loan ban could be enforced. I would want to know how they justify that, before getting into it further, but it sounds wrong to me.
