Tom, a Colorado homeowner in foreclosure, was contacted by an equity purchaser who offered to buy his home. The equity purchaser failed to provide Tom with the required written notice of his rescission rights under the Colorado Foreclosure Protection Act before Tom signed the contract. What is the legal consequence of this omission?
Correct Answer
A) The contract is voidable at Tom's option, and the rescission period may be extended beyond the standard five business days
Under the Colorado Foreclosure Protection Act (C.R.S. § 6-1-1101 et seq.), an equity purchaser is required to provide the homeowner with written notice of the right to rescind before the contract is signed. If the required notice is not provided, the contract is voidable at the homeowner's option, and the rescission period may be extended, giving the homeowner additional protection beyond the standard five-business-day window.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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