CAI-NJ May 2022 Community Trends

FANNIE MAE... from page 20.

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of the condition of the building. A myriad of potential legal issues could arise due to an unqualified or inac curate representation concerning the structural integrity of the building. An inaccurate or misunderstood statement from the questionnaire could be used against the community association in a variety of ways in differing types of legal actions, such as a personal inju ry matters, negligence suits that could be brought against the particular association, and even suits between buyers and sellers of units. Likewise, asking a board or man ager to make representations concern ing anticipated building violations or assessments requires the proverbial crystal ball. Board members and property managers can likely recall times when its’ board spent years speculating about a particular project, whether they thought they may receive a violation, and engaging in grueling debate as to the best way to fund it, only to have it not move forward due to lack of approval or otherwise. The issue therefore arises as to when something “anticipated” should be disclosed to a lender. Given the legal structure and requirements of how community association boards oper ate, to speak in terms of anticipated matters in this context is nonsensical. A board has either approved, or not approved, a project or assessment. A municipality has either issued, or it has not issued, a violation. The end-goals of what Fannie Mae and Freddie Mac are trying to accom plish is welcomed. The community

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