There is no “right” answer to this question because the changes made by the FHA are so recent. We have yet to see the legal ramifications of a Board voting against obtaining approval, but this situation has already caused turmoil and many headaches within communities.
A popular opinion was recently expressed in an L.A. Times article regarding FHA condo approval:
“By denying requests for approvals, board members may be opening the doors to lawsuits if owners cannot obtain a reverse mortgage or FHA loan and, in turn, lose their property.
If a condo owner misses the deadline for a loan, this may result in the board being held responsible for any fees that ensue. On top of that, they may also be facing charges of negligence and discrimination. No board director has the unilateral authority to control the assets of others, to decide what families can and cannot purchase in a development, and what mortgages are acceptable.”
March 6, 2011 L.A. Times