Invalid Contracts Written On New Construction...What's a Buyer To Do?

The article implies it was "routine" outside review (and not acknowledging any influence of threatening buyers/attorneys wanting out) that found this? but... if routine why not previously?

Or one would assume certainly such double check would of been made before trusting a new contract on a multi million dollar 153 unit project...    

If HUD isn't requiring action again makes one wonder how serious  the "technical" flaw really was... and whether in a normal market condition what outcome would have been determined..

It would interesting to know what if anything was actually different from older projects  in the contract wording... or if somebody needing out finally started looking for loop holes, any out to cut their loss...

Is this just another case of LAWYERS digging deeper and much pickier about wording trying to find anything and everything that could possibly get THEM or one of their clients out of a speculative deal gone the wrong way?  i.e. and/or in the rush to close during the boom years, was nobody paying attention while counting the profits?

Maybe some of your agents can check their latest contract with one of the other successful closes and let you know...

If this project is already out of the ground. (as it seems for the article??? )-_--.. It will sell at some Price!...

And if the developers understand the full role of the proper Realtor to do so!

The beauty of the market is that it's just that.. a competiitive  place that  if one wishes to sell the willing buyer's price can be found..., hopefully with the  market corrected in 2008..  If marketed correctly  willing  buyers (with adequate cash or credit )should still  be available that can close....

And if this project is  yet to be constructed... likely it or something similar will be revived and built as future  demand builds as buyers more fully  understand the restrictions of Floridas  waterfront "condo " market and acreage limitations  in many markets going into the future...

Thanks again Cris for pointing out all of us should be much ever more careful about the details of the fine print and details on listings, contracts etc..

Having seen recent news articles on even buyers sueing their real estate agent  (they bought a house they now claim was "over market price" and that's  the realtors fault- you've likely seen it too).. Has it reached a point that agents are going to need everybody involved to sign a non-litigation agreement for just about everything?  non-representation likely won't stop the lawsuits either!

leaving anything less than technically correct should be avoided.  Just sound business practise I agree.. but like you've shown there's a risk as well as  a tendency to trust developers (often required) contracts or other agents work without "offending" by making good corrections...etc..  but this shows there's lots of worse things than being known as a "NIT-PICKER" 

    Of course sometimes you can just blame it on the broker for such thoughness of meeting such  requirements  (lol) or does the CEO get the credit for being the Contract Paperwork Double Checker?

This error was not found during a "routine review" of their contracts.  I brought the first ILSA lawsuit against the builder in early January.  Their outside counsel acknowledged that their contract was defective for not properly including language that would have exempted themselves from the reach of ILSA.  They resolved the cases by issuing a memo as referred to in the Clearwater Gazette article.  Later in the year HUD fined the developer $10,000 for issuing their contracts in violation of ILSA.  Just FYI.  Don't believe everything the newspapers report.

Hank Sorensen, Esq.