A buyer purchases a condominium unit in a high-rise building in Ocean City, Maryland. The seller provides the Maryland condominium resale package on June 1st. The buyer reviews the package and discovers that the condominium association has a pending special assessment of $15,000 per unit for roof replacement that was voted on but not yet levied. The buyer was not informed of this assessment prior to receiving the resale package. The buyer wishes to rescind the contract. Under the Maryland Condominium Act, which of the following is the most accurate statement about the buyer's rights?
Correct Answer
A) The buyer may rescind the contract within 7 days of receiving the resale package because the pending special assessment is a material fact that must be disclosed in the resale package
Under the Maryland Condominium Act (Md. Code Ann., Real Prop. § 11-135), the condominium resale package must include disclosure of any pending or approved special assessments, even if not yet levied. A voted-but-not-yet-levied special assessment of $15,000 per unit is a material fact that must be disclosed. The buyer has 7 days from receipt of the resale package to rescind the contract. Receiving the package on June 1st means the buyer must rescind by June 8th. The pending special assessment — which was not disclosed prior to the resale package — gives the buyer full rescission rights within the 7-day window.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A breach of contract occurs when one party fails to perform their obligations under the contract without a legal excuse. The non-breaching party is entitled to legal remedies including damages, specific performance, or contract rescission.
Consideration is something of value exchanged between parties to a contract, making the agreement legally binding. It can be money, a promise to act, a promise to refrain from acting, or anything else of value.
Contingencies are conditions written into a real estate contract that must be met before the transaction can close. If a contingency is not satisfied, the buyer can typically cancel the contract without penalty.
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