Legal Question in Real Estate Law in California

Re: Hoa reserves

Jimmy,

You are risking a lot of things if something goes wrong. I strongly suggest having an attorney handle this matter for you. Let me know if you want a consult.

Best,

Daniel Bakondi, Esq.

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Re: Hoa reserves

A basic question here is who owns the golf course? I assume, since you are talking about four associations "loaning" the money to the golf course, that none of the associations actually own or have ownership interest in the golf course. As such, I disagree with Attorneys Bakondi and Muntean that the four associations can "loan" money to the golf course from their reserves. Reserves generally have to be invested in conservative vehicles, and advancing money to a golf course that cannot afford to pay for replacement sprinklers is probably not a "sound" investment on the Association's part. Each of the four associations needs to consult with its own legal counsel, and reach an informed decision. Certainly, Attorney Muntean's suggestion about there needing to be sufficient equity, etc... will be a part of the equation, but from the basics you posted here, I would not advise any of the Associations to invest their reserves in a junior priority deed of trust secured by a golf course which appears to be financially questionable.

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Re: Hoa reserves

Jimmy:

They can but they need to be careful, especially in this real estate market. The loans need to be fully documented and fully secured by real property owned by the HOA that has sufficient value in the present market to support the sum total of the loans.

The other approach would be to do a general assessment of all homeowners to pay for the expense, but I am guessing that choice has already been vetted.