First investment condo; HOA considering construction lawsuit

[Kristine Thompson]

I finally made the decision on purchasing my first investment property for a mid term rental in Seattle near the top hospitals. It seemed to be exactly what I wanted, but after my offer was accepted and the person I hired for the resale certificate was reviewing HOA documents, we learned there were some construction defects detected in the early months, and the latest unit impacted just this past month. Primarily, the water barrier materials were not installed correctly in some areas (It's Seattle!!) and the pooling water was compromising windows, decks, draining, etc. There is a question at how widespread the problems MIGHT be and I'm trying to assess my risk in a potential assessment in the near future. The HOA claims all issues have been addressed and corrected; however, a claim (lawsuit?) was filed with King County Courts with a trial date for one year. Even though the HOA says things are ok now, and finally provided me with the Building Envelope Report, the lawyer seems to be painting a potentially bleak picture. Being my first time, I'm unsure how to sift through all of this information and make an informed decision. Obviously no one can really tell me if there will be any more problems, but we all know it's quite possible. Do I bail? Do I ask for a lower price to cover some potential expenses? Does this normally occur when buying a condo? Help!