A prospective purchaser, such as a large investor, may also have different end goals compared to the remaining residents. For example, if an investor who is looking to maximize cash flow purchases the apartments, they may exert influence on the condo board to defer or minimize building capital improvement projects.
While the risk of a worst case scenario with a full blown default and foreclosure remains low, it’s a more likely outcome for smaller developers. As a purchaser, it’s a good idea to familiarize yourself with the developer of the building you’re considering by looking at their track record of similar buildings.
In a worst case scenario, you may also be responsible for paying higher common charges in the event of a default by the developer.