Appeals Court Upholds Buyer’s Right to Cancel Purchase Agreements
In a recent case in the Florida Court of Appeals, it was determined that a buyer has the right to cancel a purchase agreement on a condominium if the seller does not deliver documents provided by the Florida Condominium Act (FCA), including past the scheduled closing date. This scenario mirrors what might occur in Maryland.
The ruling stems from a case involving Jeffrey Bydalek and Eduardo Saenz for backing out on a purchase agreement on Bydalek’s condominium. Saenz claimed he canceled the agreement because the May 4, 2021 closing specified within the contract never occurred, nor did Bydalek provide the required documents under the FCA.
Saenz notified Bydalek that he was canceling the purchase contract on May 13, 2021, requesting his deposit be returned. Bydalek refused, and Saenz sued the owner for breach of contract per disclosure in the agreement, entitling the buyer to cancel the purchase agreement in writing “within three days after execution of the agreement and receipt by the buyer of specified condominium governing documents.”
The FCA mandates the disclosure’s exact wording and requires it to be in conspicuous type, such as bold or capital letters, to set it apart on the page. The disclosure further states that the buyer’s right to void the agreement terminates at closing, which did not occur, giving Saenz the right to cancel the purchase. The trial court granted in favor of Saenz and ordered Bydalek to return his deposit. Bydalek appealed the decision.
The required disclosure establishes two circumstances that eliminate a buyer’s right to cancel a purchase agreement, as follows:
- The buyer may cancel up to three days following the contract signing and receiving the condominium documents.
- If the buyer elects to finalize the purchase without receiving the condominium documents, then the buyer’s right to cancel terminates “at closing.”
Bydalek admittedly did not provide the condominium documents, extending Saenz’s right to cancel. However, he continued to insist that the option to cancel terminated on the scheduled closing date, regardless of whether closing took place.
The appeals court determined that “at closing” means the date on which closing occurs or is consummated. The court found that the FCA provides the buyer’s right to cancel if the condominium documents are not provided, nor has the buyer elected to close without them in plain and unambiguous language. The trial court’s judgment was affirmed, and Bydalek was again ordered to return the deposit.
Buyer’s rights in Maryland are similar. The Maryland Condominium Act requires the seller to provide a “Resale Package” to potential buyers 15 days ahead of closing, which must include the Declaration of the Condominium Association and any amendments, bylaws, condominium rules and regulations, and a “Resale Disclosure Certificate” containing additional information regarding the Condominium Association and the unit being sold. The association is responsible for preparing portions of the Resale Disclosure Certificate, and the seller is responsible for all remaining information.
Once received, the buyer has seven days to cancel the purchase agreement by filing a Unilateral Notice of Termination Under Contract of Sale or at any time if the resale package is not provided prior to closing.
Contact the Ocean City Condo Association Lawyers at Oliveri & Larsen for Assistance
Navigating condominium law in Maryland can be difficult. Having an experienced Ocean City condo association lawyer in your corner is crucial. Oliveri & Larsen is a top-rated law firm that has been helping HOA/condominium owners for decades. For more information or to schedule an initial consultation, call 410-295-3000 or contact us online today. Located in Annapolis, Maryland, we serve clients in Ocean City, Anne Arundel County, Baltimore County, Baltimore City, Calvert County, Harford County, Howard County, Queen Anne’s County, St. Mary’s County, Worcester County, Kent County, and the upper and lower Eastern Shores of Maryland.