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Trunnell Law Files Suit Against Condominium for Failure to Maintain FHA Certification

When Gale Ferguson decided to sell her Glen Burnie condominium in 2011, she, like many others, hoped to upgrade to a better home. Instead, her efforts to sell turned into a nightmare. After she had secured a buyer and was just a few days away from closing in August 2011, her realtor notified her that she could not go to closing because her condominium, Oakleaf Villas Garden Condominium, had allowed its certification with the Federal Housing Administration to lapse. That meant that no one in the community, including Ms. Ferguson, could sell to buyers using FHA financing. Gale's buyers were FHA buyers, and therefore the sale could not proceed without the certification being reinstated.

On Ms. Ferguson's behalf, Trunnell Law has filed a lawsuit against the Oakleaf Villas alleging that the condominium knew its FHA certification had lapsed, failed to notify its residents, and failed to take reasonable measures to prevent the certification from lapsing. The lawsuit even alleges that after learning of the problem, Oakleaf Villas still failed to correct the issue for several months until Ms. Ferguson paid out of her own pocket for the services of an attorney who quickly remedied the problem. The lawsuit alleges that Ms. Ferguson was finally able to sell her unit in 2012, but was forced to take a substantial loss in the sale price and suffered other damages due solely to Oakleaf Villas' negligence.

"This is just another example of the hypocrisy that runs rampant with condos and HOAs," says Ms. Ferguson's attorney, Matthew Skipper. "If you paint your door the wrong color of light green, the violation letters and the fines start rolling in. But when it's time for the associations to do their jobs, they consistently drop the ball. There's a double standard."

Skipper hopes that this case prompts other condos to take action. "The ability of FHA-backed buyers to purchase within a community is of critical importance for sellers," he says. "The larger the buyer pool and the greater the demand for a unit, the more likely a seller is to realize the full asking price." Unfortunately, this truth seems lost on condos that are simply turning this important responsibility over to their unqualified and untrained property managers. "Condos are shocked when their property managers, who struggle with basic administrative tasks, fail to obtain renewal of the FHA certification," Skipper adds. "Go figure."

The case is Gale M Ferguson v. Oakleaf Villas Garden Condominium Inc., No.: 02-C-14-189578 in the Circuit Court of Maryland for Anne Arundel County.