Real estate Q&A: Do I have to sell condo to another owner in building?

Q: When we decided to sell our apartment, one of our friends wanted to buy it, and we agreed to sell it to him at a discounted price. When he went for his interview with the condo board, he was told that he could not buy it because another owner in the building was going to. Do I need to sell it to my neighbor at the discounted price, or can I just sell it to our buddy? — Manny

A: You will probably need to sell it you your neighbor.

Owning a property in a community association means that you have to follow the restrictions set out in the community’s legal documents. These restrictions are put in place to maintain a certain standard of living for the neighborhood. This usually leads to a nice community that looks good and provides amenities to its residents.

Associations have several methods to achieve this, including fining residents for breaking the rules and foreclosing for long overdue maintenance dues. Additionally, many communities will screen potential buyers and tenants before they can purchase or move in.

Sometimes, associations take additional measures to ensure that they can maintain control over who lives in their community. One such measure is called the “right of first refusal,” which means that the association or a member of the community has the option to purchase a property that is being sold, under the same terms as the original buyer. If this happens, the community buyer will take the place of the original buyer. This is done to ensure that the community is able to choose its members.

As the seller, you should not mind this arrangement because you will still receive the same amount for your property.

When you purchase a property in an association, you agree to follow the rules set out in the community documents. Because you implicitly agreed to this arrangement when you purchased, you need to follow the rules now and let your neighbor stand in for your buyer.

However, before you do so, carefully review the rules to make sure that the association is following its own rules in exercising this right. Often there are strict time frames and other conditions that must be followed, and if the association did not follow the proper procedure, it may have already waived the right of first refusal, in which case you will still be able to sell to your friend.