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Contingencies do matter when buying or selling Condos in St Petersburg

Contingencies do matter when buying or selling condos in St Petersburg.  One contingency that has been the cause of contract cancellations lately is buyer review of condo documents. Here’s a sample of that clause:

This agreement is voidable by buyer…within 3 days…after…receipt…of:

  • a current copy of the declaration of condominium
  • articles of incorporation
  • bylaws and rules of the association
  • copy of the most recent year-end financial information
  • frequently asked questions and answers document.

Any purported waiver of these voidability rights shall be of no effect.

One contract was cancelled by the buyer because there were inadequate reserves. Many condos have not fully funded their reserves, intending to keep the monthly fees down. However, this can lead to large assessments when work must be done and the funds aren’t there in reserve.

Another contract was cancelled by the buyer because of a restriction on rentals. The documents said only one rental per year. Within the 3 day rescission period, the buyer met with the Interview Committee and asked “What happens if I rent for a year and through no fault of mine the tenant leaves, for example if he loses his job and can’t afford the rent or if he goes bankrupt?”  The firm answer was,  “Then it will stay vacant. Do a better job of choosing your tenant the next time.”  The buyer cancelled the contract.

Tip to sellers: you want all contingencies removed as soon as possible. Assemble all of these documents and have them ready when you get an offer on your condo. You don’t want to lose time waiting to get them all together. Note that you not only need the condo documents, but all amendments over the years.

Tip to buyers: review all the documents carefully. If you’re not comfortable doing this, have an attorney and/or accountant review them within your 3 day review period.

Tip to condo associations: Unfunded reserves can come back to bite you.

For help buying a condo or selling a condo in St Petersburg, contact The Simms Team at ALVA International, Inc.

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