HOA & Occupancy Restrictions Issue

[Peter Stewart]

Have a situation and I'm curious if anyone has had a similar issue, and if so, wondering what the outcome was.

I own a 2br 980sq ft condo in Inglewood, CA that I am currently selling. I am under contract and the buyers are a family of 6 (husband, wife, 4 kids). Halfway through the transaction we found out that the CCR's restrict occupancy to 5 people (the 2+1 rule). Per the HOA management company, the HOA, and the HOA's legal counsel, the rules are the rules, and they cannot be changed (even if the board/homeowners vote...it could be overturned). Basically they said "too bad".

Initially both the buyers and I felt this was a clear fair housing violation (familial status). I've spoken to HUD (no help) as well as the code enforcement dept of Inglewood (who HUD told me to call, also no help). I have also been in touch with an RE attorney in LA as well as my agents legal counsel. I'm not really getting any solid answers. It seems like a big grey area, and one that would require an expensive and lengthy lawsuit to (attempt) to solve.

Of course the obvious answer is to cancel the contract and find a new buyer that doesn't have 4 kids. My issue is that we're under contract at a very good price, and a new buyer could mean tens of thousands of dollars less for me. Not to mention delays in closing. So, I'm highly motivated to find a way to make this work for my buyers.

Has anyone else run into a similar issue? If so, how did you resolve it?