Knowledge Mondays – Can a Buyer Cancel a Real Estate Contract?
Typically, if a buyer walks away from a real estate contract, he is faced with penalties for breaching the contract. However, there are certain circumstances where a buyer can cancel a real estate contract without penalty in Florida.
When a buyer and seller enter into a purchase contract, they have obligations that they must meet within a certain time frame. If a seller does not meet the obligations stated in the contract, a buyer may be able to walk away from the contract. A seller may breach a purchase contract by not providing completed disclosures on time, not providing loan payoff information, or refusing to sign the closing documents. If a buyer is faced with a situation where a seller breaches the real estate contract, the buyer can decide to terminate the contract, force specific performance from the seller, or seek damages for the breach.
Most Florida purchase contracts include an inspection clause that states an inspection period that a buyer must abide by. The inspection period provides a time frame for the buyer to conduct an inspection. During the inspection period the buyer may terminate the contract by delivering written notice to the seller if the property is not acceptable anymore to the buyer.
Additionally, a buyer may walk away from a purchase contract if after a title search the buyer and seller learn that there is an encumbrance on the property that affects or negates real property ownership in the near or distant future. A cloud on a title can be in a form of an unreleased lien, a deed, or a claim. If the cloud on title cannot be resolved, the buyer is entitled to terminate the contract.
It is crucial, that as a buyer you have an understanding of any clauses within the contract that allows you to terminate your real estate purchase contract. If you would like to discuss your purchase contract and obligations, schedule a consultation with the experienced attorneys at Alvarez Law Group today. Call us at (786) 620-2820 or email firstname.lastname@example.org to schedule a consultation.
*Disclaimer: this blog post is not intended to be legal advice. *