A buyer named Darius signed a contract to purchase a unit in a PREDFDA-registered condominium in Montclair, New Jersey. He received the Public Offering Statement five days after signing the contract. On the third day after receiving the POS, Darius decides he no longer wants the unit and sends a written rescission notice to the developer. The developer refuses to honor the rescission, arguing that Darius signed the contract before receiving the POS and therefore cannot rescind. Which of the following is correct?
Correct Answer
B) Darius's rescission is valid because PREDFDA's seven-day rescission period runs from the date of POS receipt, regardless of when the contract was signed
Under PREDFDA (N.J.S.A. 45:22A-21 et seq.), the seven-day right of rescission begins from the date the buyer actually receives the Public Offering Statement, not from the date the contract is signed. Even if the contract was signed before the POS was delivered, the rescission right is triggered upon POS receipt. Darius received the POS and exercised his rescission right on day 3 — well within the seven-day window. His rescission is valid, and the developer cannot refuse to honor it.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
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