When a Condo Developer Goes Bankrupt, It Can Mean Trouble for Early Buyers

· Ask the developer how many units are under contract.

· Insist that the developer and your mortgage lender strictly adhere to a requirement that at least 50 percent of the units be under contract before you are obligated to go to settlement.

· Try to get the developer to agree that should comparable units in the project be discounted more than 10 percent below your sales price, you would be allowed to either match that lower price or get your money back. This may not be possible, but it is worth asking.

Whether you are considering buying in a new building or in a conversion, after you sign a sales contract, you will receive a lengthy document called a Public Offering Statement. You will have several days in which to unilaterally terminate the purchase contract. The number of days varies depending on the jurisdiction.

The offering statement contains such matters as the legal documents, the proposed budget and any warranties provided by the developer. It also includes the rules that will govern your conduct as a condominium owner.

Read this document very carefully. If you have questions, ask the developer to answer your concerns before your time limit expires. Go to the project over a weekend or early in the evening and try to discuss the building condition with some of the new owners. And have your lawyer and your financial advisers review the legal documents and the proposed budget to determine if they are in order.

Buying a condominium is a serious matter. Buying in a slow market requires even more attention.

Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, Suite 1100, 1050 17th St. NW, Washington, D.C. 20036. Readers may also send questions to him at that address.