The Real Estate market in downtown San Diego offers a wide variety of property types and styles to suit the needs and taste of virtually anyone.
However, if you are in the market to purchase a condo with a mortgage loan with less than a 30% down payment the selection of properties is a bit more limited.
The reason is that there is a handful of downtown San Diego condo buildings that are currently in litigation. When litigation happens it is usually challenging to find a lender that would finance a condo or loft in a residential complex that is in the process of litigation. The lenders that do loans in litigation buildings usually require a 25% or 30% down payment.
Litigation in downtown San Diego condos typically happens when an HOA sues a developer for construction defects (typically within the 10 first years of the building being built as per California law the developer is responsible for construction related problems arising in this time period).
These construction defects could include malfunctioning windows (like happened in Horizons a few years ago), sewage pipes issues (The Grande North Tower), bathroom leaks (Park Loft), malfunctioning jacuzzi’s, garage doors and an wide array of thing that could encourage an HOA to sue a developer for the cost associated with fixing these issues so they don’t have to claim it on their insurance or pay out of the HOA’s reserves.
For cash buyers or those with a substantial down payment litigation is actually not a bad thing. Given that litigation units have a limited market (due to the lack of financing available) they tend to be priced lower. However, once litigation ends, prices usually shot up pretty quickly. A perfect example is Park Loft were property prices increased 10% to 15% almost overnight once litigation settled. Condo prices at El Cortez also increased dramatically after litigation settled.
Also, when a litigation case settles monthly home owner association fees for that building usually tend to decrease as well. Typically throughout the litigation process HOA’s raise home owner fees to have enough funds to cover legal fees and other costs associated with the case. But once litigation settles fees are usually reduced almost immediately. For example HOA fees at El Cortez were decreased about 10% once litigation settled. Park Loft HOA fees were decreased as well once litigation settled.
Below is a list of Downtown San Diego Condos and Downtown San Diego Lofts currently in litigation. If you are interested in purchasing a residence in any of these buildings please call us for more information regarding the litigation details and if you need financing we’ll refer you to the appropriate mortgage lender. We work with a few lenders willing to lend for most of these properties.
This list is updated in a monthly basis (last update March 2013).
- 235 Market
- 350 West Ash
- Cortez Blu
- Crown Bay
- La Vita
- Park Terrace
- Porto Sienna
- The Mills
- Union Square
Condos that had litigation in the past and were removed from the list:
- Acqua Vista
- Diamond Terrace
- Park Loft
- Park Place
- The Grande
- The Pinnacle