Question: The contract with the homebuilder contains
an “Anti-Speculation Clause,” which is designed to prevent investors
from purchasing homes in the subdivision. Under this “Anti-Speculation
Clause,” the homebuilder has the right to re-purchase the
home from the buyer if the buyer sells the home within two years
after close of escrow. The homebuilder has recorded a document
entitled Notice of Anti-Speculation Clause. Six months after
the close of escrow the buyer wants to refinance the mortgage
loan, but the refinancing mortgage lender will not provide the
refinancing because of this recorded Notice of Anti-Speculation
Clause. Is this recorded Notice of Anti-Speculation Clause
legal?
Answer: Yes. Unless the contract prohibits recording of
an interest in the real property, the interest in real property
can be recorded. The right to repurchase the home under the “Anti-Speculation
Clause” is an interest in real property. Therefore, unless the
homebuilder will subordinate this interest in real property to
the financing, the buyer will not be able to refinance the home.
