Jun 16, 2014

Tip 19-2014: Another Contract "Termination" Option

It is common knowledge in the real estate community that a buyer has three days after the receipt of an HOA disclosure packet to review the documents. Within the three days, the buyer can decide if they want to terminate the contract due to the information contained in the HOA packet.  A few months ago, the Virginia Association of Realtors released a new home inspection contingency form that provides the buyer another way to terminate a contract with no cause as long as they've had the home inspection.

Under the new VAR Inspection form, if the results of the inspection are unacceptable to the buyer, the buyer has two options. The Buyer can either "provide the Seller, prior to home inspection deadline, an entire copy of the report and a written addendum listing the specific existing deficiencies that the Buyer requests the Seller to remedy along with the Buyer's suggested remedies." OR, "the Buyer can simply provide written evidence that such inspection was performed along with a notice terminating the contract. Upon request by Seller, Buyer shall provide an entire copy of the inspection report to the Seller."

The Buyer will have to pay a few hundred dollars to terminate the contract, but this new contingency does provide the Buyer with a giant "get out of jail free card." Hopefully, this possibility will only be used if there are real inspection issues, but it definitely could be abused.

P.S. Tucker's Tips will continue to monitor the situation.
Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker, III
Tucker Griffin Barnes P.C.
Charlottesville, VA

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