Asked and AnsweredWe just submitted the Board package and we realize that we neglected to disclose a lawsuit against my husband’s company, in which my husband is named as a defendant? The lawsuit is covered by insurance and my husband is indemnified from liability by his employer. Should we notify the managing agent and amend the purchase application?
Because of the variables of the facts surrounding the submission of a Board package, it would not be appropriate to give a definitive answer to this type of question. That being said, good faith errors can occur when a purchase application is submitted. Whether or not a purchase application should be corrected after it has been submitted is a very slippery slope and should be reviewed carefully. In this situation, it’s likely that the lawsuit will not come up on the lien search or credit report, but then again, it might. One could take the position that the failure to disclose this lawsuit is immaterial as it has not financial impact on the party named in the lawsuit.
Residential reality: prepare the Board package carefully. When in doubt about a disclosure, discuss the issue with your attorney before submission of your Board package.