Legal Question in Real Estate Law in Oregon

(State of Oregon) I own a condominium that I purchased just before the downturn and when the unit was purchased, we were explicitly told that it must be our primary residence and not used as a rental. I, along with virtually all of my homeowner neighbors, all bought in our complex exactly FOR this reason and the contract language pertaining to renting is explicitly outlined in our loan documents. Our complex happens to be very near a community college and following the housing market crash, the developer rented out all of the remaining vacant units, which constitutes the majority of the complex. Consequently, I now live in an 850 square foot, glorified college dormitory unit for which I just happened to pay $224,900, and I've been dealing with the ridiculous decorum, ill manners, lack of courtesy, etc. that comes along with a population of community college students. I certainly did not pay this amount of money to deal with this kind of garbage and I'm now fed up. Do I have any recourse of action? Is the developer in breech of contract? Additionally, when I refinanced, the appraisal came back at $87,000 and most recently a neighbor received an appraisal in the $115,000 range, therefore simply selling and moving isn't an option. Any suggestions, guidance, or insight is greatly appreciated. Thank you in advance.

Asked on 9/14/13, 3:29 pm

1 Answer from Attorneys

Daniel Meek Daniel W. Meek

The developer may or may not be violating its contract with you. You need to read all of the contracts you have with the developer and with the HOA, as well as all contracts between the developer and the HOA. Those contracts may prohibit the developer from renting out units (or more than a certain number of units). If so, sue the developer for breach of contract. You would also have a breach of contract action against the developer if it promised to you, before you bought, that it would not rent out units. Of course, an oral promise is very difficult to prove.

You might also be able to bring a tort action against the developer for nuisance and reduction in value of your property. You would have to prove that you had a justifiable expectation that units would not be rented.

Both of the above lawsuits could be brought as class actions, on behalf of all of the unit owners who do not choose to opt out, unless the contract you signed with the developer exempts the developer from all class actions (which can be done now, thanks to recent 5-4 decisions of the U.S. Supreme Court).

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Answered on 9/15/13, 4:56 am

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