A Colorado buyer enters into a Contract to Buy and Sell Real Estate for a property in a common interest community. The seller delivers the CCIOA-required HOA documents on Day 1. The buyer's HOA review period is 5 days. On Day 4, the buyer discovers that the HOA has a pending special assessment of $15,000 per unit for roof replacement — a fact that was NOT disclosed in the seller's property disclosure. The buyer wants to terminate the contract. Which of the following most accurately describes the buyer's options?
Correct Answer
D) The buyer may terminate under the HOA document review right and may also have a claim against the seller for failure to disclose a known material fact under the Seller's Property Disclosure Act
The buyer has two overlapping but independent bases for action. First, under CCIOA (C.R.S. § 38-33.3-209.4), the buyer may terminate during the HOA document review period for any reason, including discovering the pending special assessment in the HOA documents. Second, a known pending special assessment of $15,000 is a material fact that the seller was required to disclose under Colorado's Seller's Property Disclosure Act (C.R.S. § 38-35.7-101). The seller's failure to disclose this known material fact may give rise to a separate claim for rescission or damages, independent of the contractual termination right.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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