Question with potential condo purchase with pending litigation

[Jason Sterling]

All,

Looking at my first deal, an investment that I would look to rent out.

Potential cash purchase, and it is an enticing deal that I could get relatively good value on, but the issue is such - there is pending litigation against the HOA for mold ( not my unit, or even my condo section). However, even if I wanted to go through traditional financing, i could not because of this issue, which is probably why there is good value.

As I am new to the investment world, and this situation seems a little hairy, has anyone run across similar circumstances? I dont know what my potential liability is if there is a large settlement ( does HOA have insurance themselves to cover most of it), what would happen if it bankrupted HOA? Does community go to sh*t?

Would love any insight, and thank you!

Jason