Very Important Guidance for Condo and HOA Docs for Maryland Home Buyers

By
Real Estate Broker/Owner with Maxus Realty Group - Broker 301-246-0001 Broker - Realtor - CEO

 

Deposit Refunds Because of Condo or HOA Documents

 

 

Please note the part where the seller can keep the cost associated with the resale package even if the buyer decides to walk

 

The following was taken form the real estate conmmision site and its purpose is to inform the public of these laws when purchasing condos and townhouses  in Maryland . .as written!

 

"MAR represents Maryland REALTORS® by making your voice heard in Congress and at the State Legislature. Our primary concern is protecting your professional and business interests. Our Legislative and Public Policy Committees develop a straightforward political agenda to:Support and develop legislation that helps our industry, and Oppose legislation that hurts the free transfer of real estate. The Legislative Committee typically reviews over 200 pieces of legislation and regulations each year.

Deposit Refunds-- Rescission of Condo or HOA Contract

By Kathie Connelly

Executive Director of the Maryland Real Estate Commission

 

At recent monthly meetings, the Maryland Real Estate Commission provided guidance to real estate brokers holding earnest money deposits for buyers who are entitled to cancel a residential contract of sale, either because condominium or homeowners association documents are not provided by the seller, or the buyer exercises the right to rescind the contract after receiving the documents.

 

Buyers who enter into contracts to purchase residential real estate in a condominium or homeowners association development are entitled to several disclosures from the seller, including notice of fees payable to the council of condominium owners or HOA; restrictive covenants that result from the property being subject to an HOA or Condo regime; and insurance coverage on common areas of the development where the property is located.  

 

A buyer who enters into a contract but who has not received the required HOA documents and disclosures may cancel the contract any time before closing, and is entitled to “immediate return of deposits made on account of the contract.”  Real Property Article 11B-108(a).   A buyer who does not receive the HOA documents and disclosures at least five days prior to entering into the sales contract is entitled to cancel the contract within five days of receiving the documents and disclosures.  The buyer need not state any reason for canceling the contract, as long as the cancelation is in writing.  The buyer is entitled to the “return of any deposits made on account of the contract, except that the vendor shall be entitled to retain the cost of reproducing” the documents and information disclosed to the buyer.  Real Property Article 11B-108(b).  

 

A purchaser who enters into a contract of sale to purchase a condominium is entitled to cancel the contract within 7 days of receipt of the required documents and disclosures and is thereafter entitled to “return of any deposit made on account of the contract.”  Real Property Article 11-135 (f).

 

The Real Estate Commission takes the position that the HOA and Condominium Acts allow a broker to refund the buyer’s earnest money deposit when the buyer has canceled the contract exercising the right to cancel after receipt of the HOA or Condo documents and disclosures, without first obtaining a signed release from the seller.  Brokers know that the Business Occupations Article requires that they maintain deposit monies in an approved account until a transaction is consummated or terminated, written instructions from the parties are received, an interpleader is filed in court or neither party objects to the broker’s proposed disposition of the deposit. Business Occupations Article 17-505 (a).  Following this new policy statement by the Real Estate Commission, a broker may return the buyer’s deposit once written notice to cancel the contract is given.

 

 

To obtain the latest information please do so by  by visiting the Commission’s website at http://www.dllr.state.md.us/license/mrec/.  You may also call the Commission at (410) 230-6200.

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Real Estate Market Trends
Groups:
Realtors®
Localism Beta
Local Expert
Tags:
real estate in maryland
realtor germantown
realtor gaithersburg

Post a Comment
Spam prevention
Spam prevention
Post a Comment
Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Ambassador
1,976,308

Fernando Herboso - Broker for Maxus Realty Group

301-246-0001 Serving Maryland, DC and Northern VA
Ask me a question
*
*
*
*
Spam prevention

Additional Information