Carlos is purchasing a new condominium unit in a PREDFDA-registered development in Hudson County. He signed the purchase contract and received the Public Offering Statement on the same day. Five days later, Carlos changed his mind and wants to rescind the contract. The developer's sales agent tells Carlos that because he signed the contract before receiving the POS, he waived his rescission right. Which statement is correct?
Correct Answer
B) Carlos has a valid rescission right because PREDFDA's seven-day period begins when the POS is received, regardless of when the contract was signed.
Under PREDFDA (N.J.S.A. 45:22A-21 et seq.), the seven-day rescission period begins when the buyer receives the Public Offering Statement, not when the contract is signed. The statute specifically provides that a buyer may rescind within seven calendar days of receiving the POS. A developer cannot require a buyer to waive this right, and any purported waiver is void as against public policy. Since Carlos received the POS on the day he signed and only five calendar days have passed, his rescission right is still valid.
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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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