There May Be a Way to Back Out of a Pre-Construction Purchase on a Condo

Posted on July 14, 2007. Filed under: Pre-Construction Contracts |

Buyers are eager to get out of pre-construction contracts signed during the recent real estate frenzy. Now that the market has turned and the flippers market has died, many buyers are trying to undo their deals based on even minor changes to a project by a developer. Under Florida law, buyers can void purchase contracts if developers make changes a buyer considers “material and adverse.” (Source: The Miami Herald: July 13, 2007)

Unfortunately, the law is vague about what “material and adverse” means, creating confusion among buyers and developers. In a July 6 ruling, a Palm Beach County judge  sought to clarify the law for the first time.

Changes in a condo’s proposed budget can be a big issue for buyers facing sky-high insurance increases. If a buyer shows evidence the rise in costs “outweigh the buyer’s financial capabilities . . . the buyer should be able to void the agreement,” the Judge wrote.

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