Legal Question in Real Estate Law in California

Re: Condo puchase, HOA fees include SBA loan

By now, your escrow situation has undoubtedly cleared up, either by the deal closing or coming unglued. However, a few comments in partial answer to your questions might be helpful.

First, if you assume a loan, you become responsible.

Second, the assumability of a loan depends (at least in part) on its own terms. Without reading the note, a full answer isn't possible.

Next, by SBA I assume you mean Small Business Administration. They don't (to my knowledge) normally lend on residential real estate, but they do take liens on business borrowers' homes. That may be what happened here.

Your question doesn't make it completely clear what party is the obligor (borrower) on the SBA 'loan' -- is it the seller of the unit you're buying, or the condominium association? In other words, would you be writing two checks or one?

In sum, it seems to me that the disclosures were inadequate. Were you represented by an agent or broker? That would be the place to begin inquiries and to ask for explanations. The escrow officer could also provide some assistance.

Your assumption of an existing loan should be a factor in the price you pay. You should in net effect get a price reduction if you assume debt on which the seller is obligated.