Home Buying in Orange Beach>Question Details

Pauli Moss, Home Buyer in Alabama

can I get out of a presale contract to purchase a condo before it is built?

Asked by Pauli Moss, Alabama Wed Dec 12, 2007

the condo is not completed and the prices are falling - and I have not closed yet. Will I lose my deposit if I rescind on the contract before the builder gets a certificate of occupancy?

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Study your contract closely to see if the builder is in default on any of the conditions. A pre-construction purchase contract should have some timeframe for the unit to be completed and ready for occupancy. If the builder has pulled off construction and delayed finishing the project, you might have a leg to stand on when you ask for your contract to be cancelled. Having an attorney on your side is always a good idea when contracting for real estate purchases.
0 votes Thank Flag Link Tue Dec 18, 2007
You should contact an Alabama Real Estate Attorney. This attorney can look at your contract and make sure everything is either in order or not. Many people have tried to get out of these to no avail others have been able to. It all depends on what your contract says about building dates and payments due, etc. Maybe the builder would negotiate the sales price due to the market decline?
0 votes Thank Flag Link Wed Jun 24, 2009
I have not seen a pre-construction contract with a must be completed by date or CO clause, but I have seen a clause in a pre-construction sales contract that forces a developer to commit to building a development. It is my understanding that Alabama State Law requires this clause to be in pre-construction sales contracts.

For example, you go under contract in Aug 2005...the clause in the contract states that the developer must start construction or commit to starting construction by a certain date (Sept 2006). If it is after that date and the developer has not committed to starting construction or begun construction then the contract could be void...unless he has an addendum or a new contract signed by you extending this time.

I have personally seen this happen several times over the last several years. Pre-construction sales obviously take longer than they once did and this is a way for a developer to not be able to keep you under contract forever. Most developers will not commit to build unless they have enough pre-sales to feel comfortable about moving forward.

As always, get expert advice from a real estate attorney!!

Hope this helps!!
Web Reference: http://www.buythebeach.com
0 votes Thank Flag Link Fri Mar 14, 2008
You probably will loose your deposit--you have a contract. I would suggest you contact a real estate attorney to look at your contract, but the chances are pretty good that the builder crafted a pretty tight agreement that would prevent buyers from suffering "buyer's remorse". You have to decide as well if it is better to loose the deposit or close on a condo worth less than you are paying for it.
Web Reference: http://www.myketriebold.com
0 votes Thank Flag Link Wed Dec 12, 2007
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