A buyer purchases a condominium using the TREC One to Four Family Residential Contract with appropriate addenda. After closing, the buyer discovers that the condominium association's bylaws prohibit short-term rentals. The buyer had planned to use the unit as a vacation rental. The buyer:
Correct Answer
C) May have a claim against the seller if the restriction was known but not disclosed, but must comply with the bylaws
The buyer must comply with the condominium bylaws. If the seller knew about the rental restriction and failed to disclose it, the buyer may have a claim for nondisclosure. The buyer should have reviewed the condo documents during the review period.
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Related Topics & Key Terms
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Related Concepts
An inspection contingency gives the buyer the right to have the property professionally inspected within a specified time frame and to negotiate repairs or cancel the contract based on the findings.
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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