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?

[Thomas S.]

Under the circumstances I would think that what you want would be irrelevant. I would guess that your buyer would be a fool to go ahead with the purchase and has a legal right to terminate the agreement. Has his lawyer not informed you he wants to terminate the purchase. From the buyers perspective the obvious answer is clearly to cancel the contract.

From your perspective it would be a waste of time to try and save this deal. It would be on hold indefinably trying to reverse the HOA rules. Some battles simply are not worth fighting for any amount of money.

Time to move on.