Buyer Chen is purchasing a condo in Atlantic Station. During the review period, she discovers the association's reserve fund is significantly underfunded for upcoming major repairs. The seller claims this wasn't disclosed because no formal assessment has been levied yet. What are Chen's rights under Georgia law?
Correct Answer
D) Chen can terminate the contract if the reserve study shows inadequate funding for necessary repairs
Correct: D - Chen can terminate the contract if the reserve study shows inadequate funding for necessary repairs. Chen can terminate the contract if the reserve study or financial information shows inadequate funding for necessary repairs, as this constitutes material information that should have been disclosed. Why not A: This option is incorrect because "Chen must proceed with the purchase since no formal assessment exists" does not match the rule tested by the question. The correct answer is "Chen can terminate the contract if the reserve study shows inadequate funding for necessary repairs". Chen can terminate the contract if the reserve study or financial information shows inadequate funding for necessary repairs, as this constitutes material information that should have been disclosed. Why not B: This option is incorrect because "Chen can only negotiate a price reduction but cannot terminate the contract" does not match the rule tested by the question. The correct answer is "Chen can terminate the contract if the reserve study shows inadequate funding for necessary repairs". Chen can terminate the contract if the reserve study or financial information shows inadequate funding for necessary repairs, as this constitutes material information that should have been disclosed. Why not C: This option is incorrect because "Chen has no recourse since reserve fund levels are not required disclosures" does not match the rule tested by the question. The correct answer is "Chen can terminate the contract if the reserve study shows inadequate funding for necessary repairs". Chen can terminate the contract if the reserve study or financial information shows inadequate funding for necessary repairs, as this constitutes material information that should have been disclosed.
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Previous Question
The Roswell Ridge HOA board is reviewing a resale request. Which of the following is NOT required to be included in the resale certificate under Georgia law?
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Agent Williams is handling the sale of a townhome in Alpharetta Crossing HOA. The association charges a transfer fee of $150 and requires board approval for all sales. How should Williams advise his clients about these requirements?