A: "This sounds like a simple question, but the answer is not easy," observes attorney Jerry Stein, of Levin & Stein.
You're correct that you're out of luck with the original developer. And you likely wouldn't do any better filing a claim with that developer's insurance company.
"When you've got a code violation, but no physical damage, the developer's insurance doesn't cover it," Stein notes.
Alas, your inclination to go after the installation company likely wouldn't do you any good either, he says, because you can't get the installer for simple negligence.
Rather, you'd have to make a claim against the warranty, presuming there is one and your problem is covered by it.
All this is merely a lead-up to the real issue: your standing in this matter. Yes, the heating and cooling unit is for your unit. However, it's situated on the roof, which in a condo is considered common area. The condo association, not you, likely is the one to pursue this problem because it has responsibility for the roof and what's on it.
If your association has the duty to maintain that unit, you might be able to make a claim against the association to take care of it, Stein says. Read your governing documents to see where you stand.
But remember that in the end, the owners, including you, are the association, so there's no external pot of money to solve this problem.
Q: We refinanced last March, and our new loan contained a clause stating we'd have to pay a penalty if we refinance again within three years. However, the lender sold our mortgage to someone else, and therefore it was paid in full at that time. Does this not void the prepayment clause and allow us to refinance again without a penalty?
A: A prepayment penalty — usually the equivalent of six months' interest payments — is charged to a new borrower who pays off his loan within a short amount of time after acquiring it.
Usually, that payoff comes as part of a refinance. The penalty's "intent is to recoup some of the lender's expected return on the loan," explains Chuck Cross, director of consumer services for the Washington State Department of Financial Institutions.
By law, lenders must give borrowers written information explaining these penalties before they sign their final loan documents. That information governs exactly how the penalty will work. Most, says Cross, invoke the penalty if the loan is paid off in three or even five years.
This paperwork invariably states that the terms of the loan "remain in force no matter who it's sold to," he notes. "The language doesn't read 'if the loan is paid off early.' It reads 'if the borrower pays off early,' " then the penalty is due.
The Department of Financial Institutions often receives complaints from homeowners who say they weren't told their loan included such a penalty — or even that they were told it didn't. "The problem is, it's buried in the paperwork, and they (loan officers) don't have to tell you orally," Cross says. "We've had case after case where the borrower swore up and down 'the loan officer told me,' but that doesn't do any good when it comes to proving your case."
Indeed, it's what's in writing that carries the day. Cross says those who've had a problem with a prepayment penalty can file a complaint with his office by going to www.dfi.wa.gov. Look for the Consumer Services Division. |
