BUYER WALKS AWAY?

Dated: 06/08/2019

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Another reason why you need a good realtor.
KEEPING HIS EYES OPEN

What if the condo docs are incomplete?

By Joel Maxson
 

June 3, 2019 – It's common knowledge in the real estate industry that a buyer should get a collection of documents before purchasing a condominium. This rule, as it applies to non-developers, can be found at Chapter 718.503(2), Florida Statutes. The language you see in all capital letters below is taken directly from this section of the statute.

Section 5 of the Florida Realtors/Florida Bar Condominium Rider, titled Non-Developer Disclosure, gives the parties two options. The first option is to use a clause that begins "THE BUYER HEREBY ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE DECLARATION OF CONDOMINIUM …"

The parties should select this option only if the buyer received all listed documents at least three business days before signing the contract, since it means that the document delivery issue is put to rest as soon as buyer signs the contract. Courts will be very reluctant to give any relief to a buyer who agrees to this clause without first confirming it's completely accurate unless there are unusual additional facts.

Although this clause is always an option for the parties, they don't tend to use it very often.

Parties typically choose the second clause, which begins "THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER AND RECEIPT BY THE BUYER OF A CURRENT COPY OF THE DECLARATION…"

When this clause is in place, the buyer has a right to void the contract until three business days after receipt of all listed condominium documents. In most cases, the seller will deliver all documents, and the three business days will pass without incident.

But what happens if a seller refuses or neglects to deliver all of the documents? What if a condominium association refuses to provide all required documents? What if a bank-owned property seller doesn't even attempt to deliver documents?

The answer to all of these questions is in the last sentence of the clause, which simply states BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING."

What this means: If the buyer doesn't receive some or all the condominium documents, the buyer will have to decide whether that's enough of a reason to walk away from the transaction before closing.

Of course, the buyer is welcome to try and find the documents on their own by asking a community association manager, officer of the association or anyone else who may be able to help them out.

If the buyer isn't successful, though, they have a decision to make: Are they comfortable enough closing with incomplete condominium documents? If not, then their option is to void the contract before closing.

Joel Maxson is Associate General Counsel

© 2018 Florida Realtors®

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Michele Vasilescu, MA

I am a real estate professional licensed in Florida, with twelve years of experience in residential real estate, including the luxury sector. I am certified by the National Association of Realtors as ....

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