Settlement can be delayed; check your contract

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DEAR BENNY: My wife and I signed a purchase agreement in June 2011 with anticipated delivery of November/December.

In September, we were advised that delivery would be delayed until March/April of 2012. When we asked the reason for the delay, we were eventually told that the developer did not have the finances in place yet to begin development of that phase.

This is the first we had heard that there even were phases. We initially stated what lot we wanted, and the sales agent said he had to get permission to release that particular lot. He never stated that, in fact, the lot we had purchased was in phase II.

Can this be considered nondisclosure? Is there any way out of this contract? Ten months vs. five months is an unreasonable time for the seller to deliver a house, in our opinion. Any guidance you can provide would be greatly appreciated. –Emory

DEAR EMORY: Yes, it is a long time to wait, and the delay could cause you to have problems getting a good loan.

However, I need more information. Is the home in a community association? If so, does your state have laws requiring the seller to provide you with the right to cancel the contract within so many days after receiving the information about the association usually called a “public offering statement”? If so, was there any information about phasing?

Equally important is the real estate contract you signed. Does it spell out a time for settlement? The typical new home sales contract is very friendly to the seller; usual language says “settlement will take place within one year from date of contract execution.”

However, there is also language regarding “force majeure.” That means that if circumstances outside the control of the seller occur — such a bad weather, or inability to get bricks from China, etc. — the settlement date can be postponed.

I would have to read your contract before giving you a legal opinion. If you really want to get out from under that contract (something that is not always easy) please consult a local real estate attorney.

DEAR BENNY: How does one find a legitimate agent/company when selling a time share?

Do any real estate licensing boards, real estate associations or attorneys general put together and distribute a list of lawful and legitimate resellers? I would be surprised if at least one real estate association does not have a subsidiary group of time share resellers, seeing as only real estate agents can legally resell time shares.

As far as not buying a time share in the first place, that is water over the dam for many of us who have made such a purchase. We have enjoyed having ours but are getting to the point where we soon will not be able to travel. Certainly there are others who’d be interested in selling a time share (as one can sell a home they no longer can handle) without running into a scam.

Perhaps it is time to legitimize this industry and start prosecuting those who would solicit business only to take “your money and run.” –Hope

DEAR HOPE: Your name says it all.

I completely agree with you, but columnists can only call attention to the problems and expose them. I do know, however, that at least in Florida, the attorney general there is actively pursuing the scam artists in the time share arena.

Benny Kass is a practicing attorney in Washington, D.C., and Maryland. No legal relationship is created by this column. Questions for this column can be submitted to [email protected].