Two Tales-For Lenders and Realtors

Tale #1.

Lender advises realtor with VA Buyer: "I have handled multiple VA condo project approvals with no delays". Realtor has VA buyer sign contract. Escrow secures "HOA documents" and sends to Lender.

Lender submits project documents to VA. VA rejects documentation and requests filed "Articles of Incorporation" for the Association. Lender stuck. Lender does not know what to do next. Management company provided escrow with "Articles of Incorporation" provided by the original developer. No one knows what to do. Realtor calls my office.

I advised the realtor to e-mail what escrow received from the management company. As fate would have it, 42 years ago a law firm, which shall remain nameless for now, represented the developer of the Condominium Project in this transaction. For the original developer to sell Condominiums in the Project, the developer needed to create an incorporated Association to manage the Project. The law firm was hired to file the "Articles of Incorporation" with the Secretary of State and provide the filed copy to the California Department of Real Estate ("DRE") in order to secure a Final Subdivision Public Report ("White Paper").

No White Paper, no sale of Condominiums.

What did the management company have which the VA rejected ? A draft of the Articles of Incorporation, instead of the filed version. How do I know the difference ? I represent real estate developers and create both draft and final versions of Articles of Incorporation for an Association. I file the DRE approved final version with the California Secretary of State and submit to the DRE.

I secured a copy of the White Paper from the DRE. Why ? The DRE would not issue a Public Report for the Project without a copy of the filed Articles of Incorporation for the new Association. Did I check the Secretary of State's website for a copy ? Yes. A filed copy was not available online.

Next step ? Should I call the lawyer and ask why his client provided the management company with a draft of a document rather than the filed version ? Since I know the lawyer personally (and will protect his/her identity unless I am served with a valid subpoena to testify before a court or a Grand Jury or maybe receive a valid Starbucks Gift Card in the mail), I decided against this option.

I contacted my favorite attorney service who secured the filed Articles of Incorporation which was submitted to VA, with additional missing items.

One of the additional missing items was a "Certification Page" at the end of the Association Bylaws reflecting adoption by the Board as certified by the Secretary. I created a new Certification Page for the Secretary to sign.

VA approved the Project.

End of Tale #1.

Tale #2.

I spent a week to gather the paperwork for another VA approval. The complete documentation package was submitted to the VA and was sent over for legal review on Tuesday this past week. VA approval on Friday morning the same week.

Why so quick ? I prepared a VA attorney letter for this submittal to the VA which is recommended by the VA but not required.

End of Tale #2.

Post Script: I have been helping lenders and realtors for many years. My pleasure to help our veterans secure housing for themselves and their families.

To my lender friends who want impress your realtor clients, it is probably good to have someone "on board" who understands the paperwork and can get the project approved quickly. Better to get a quick approval than a "Rejection" Notice from the VA.