Condo Document Delivery - My Answer to the Hypothetical

Here is why I think the three days to rescind the contract started the day after the Purchaser in the Hypothetical described below picked up the FedEx package left at her door - in spite of instructions to the Seller to send the package care of the Purchaser's agent.

First from the first paragraph of the Virginia Jurisdictional Addendum:

"The parties agree that any documents sent to the Broker will NOT constitute Delivery.

The requirements for delivery of property or condominium owner’s association documents are specified in the Virginia Property Owners’ Association Act and/or Virginia Condominium Act paragraphs of this addendum.

No party to this Contract will refuse Delivery in order to delay or extend any deadline established in the contract."

Second:

From Paragrpah 7 of the Virginia Jurisdictional Addendum:

“The POA Act requires the Seller of a property within such a development to obtain an Association Disclosure Packet from the property owners’ association and provide it to the Purchaser. The information in the Association Disclosure Packet shall be current as of a date-specified on the Association Disclosure Packet. For delivery of the Packet or the Notice of non-availability of the Packet, the Purchaser chooses this address: .
The Purchaser may cancel the contract (a) within 3 days of the Date of Ratification if the Purchaser receives the Association Disclosure Packet on or before the Date of Ratification, (b) within 3 days after receiving the Association Disclosure Packet by hand delivery, (c) within 3 days after receiving the Association Disclosure Packet electronically with a receipt to sender, or (d) within 6 days after the postmark date if the Association Disclosure Packet is mailed to the Purchaser.”

Note that the delivery as used in Paragraph 7 has a small d not a large D. Also notice that the right of rescission runs from the receiving, not from the delivery! Note also that the Purchaser chooses and address- but does not require delivery to a specific address. As for the use of FEDEx, I think at depositions we could get everyone to stipulate that the package was delivered from the hand of the Fedex driver to the front door of the purchaser.

From the Code of Virginia:
§ 55-511. Contract disclosure statement; right of cancellation.
A. Subject to the provisions of subsection F of § 55-512, a person selling a lot shall disclose in the contract that (i) the lot is located within a development which is subject to the Virginia Property Owners' Association Act; (ii) the Act requires the seller to obtain from the property owners' association an association disclosure packet and provide it to the purchaser; (iii) the purchaser may cancel the contract within three days after receiving the association disclosure packet or being notified that the association disclosure packet will not be available; (iv) if the purchaser has received the association disclosure packet, the purchaser has a right to request an update of such disclosure packet in accordance with § 55-512; and (v) the right to receive the association disclosure packet and the right to cancel the contract are waived conclusively if not exercised before settlement.
Note that I have emphasized the term receiving - as opposed to Delivery.

“C. The information contained in the association disclosure packet shall be current as of a date specified on the association disclosure packet obtained by the seller in accordance with this section. The purchaser may cancel the contract: (i) within three days after the date of the contract, if on or before the date that the purchaser signs the contract, the purchaser receives the association disclosure packet or is notified that the association disclosure packet will not be available; (ii) within three days after receiving the association disclosure packet if the association disclosure packet or notice that the association disclosure packet will not be available is hand delivered or delivered by electronic means and a receipt obtained; or (iii) within six days after the postmark date if the association disclosure packet or notice that the association disclosure packet will not be available is sent to the purchaser by United States mail. The purchaser may also cancel the contract at any time prior to settlement if the purchaser has not been notified that the association disclosure packet will not be available and the association disclosure packet is not delivered to the purchaser. Notice of cancellation shall be provided to the lot owner or his agent by one of the following methods:”

“F. Except as expressly provided in this chapter, the provisions of this section and § 55-512 may not be varied by agreement, and the rights conferred by this section and § 55-512 may not be waived.”

I think F makes the Purchaser’s argument that the delivery was REQUIRED to pass through the agent per the contract unsustainable as the statute does not provide for the Purchaser to limit the placed to which the Seller can deliver the packet.

Also, I can tell you as someone present when the Va. Jurisdictional Addendum was drafted that we made every effort NOT to create any apparent conflicts with the Statute. We wanted the addendum to reflect the statute as closely as possible. The addition of the line for the address was designed to add information only, not to create a new requirement. That is why were careful to select the word “chooses” as opposed to “requires” or even “consents” since the statute doesn’t require the Purchasers consent to a specific place.

Let me know if you see any flaws in my analysis.

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Help Answer a "Hypothetical" Question

I have a hypothetical question that I've been asked. I have an answer but others disagree with me. I wondered if any of my subscribers had a take on this.

Here are the facts as we know them:

Seller used a commercial overnight delivery service to deliver the Condominium Association resale package to the Purchaser’s apartment. The delivery company dropped off the package in front of door. The Purchaser agrees that she picked up the package and reviewed it.

In the Contract, the Selling Agent made a notation that the Condo package was to be mailed to the Selling Agent’s office.

Question:

When does the “three-day” cancellation period begin and when does it end?
My Answer will be posted shortly. What do you think.

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The New 2008 Disclosure Form is Available for Review

All Sellers of Real Estate in Virginia must comply with Virginia's Residential Real Estate Disclosure Act by provided either a disclosure or a disclaimer form. Beginning July 1, 2008 the two forms will combined into one "disclosure form" that looks suspiciously similar to the old disclaimer form. The current disclosure and disclaimer forms will remain on the DPOR website through December 31, 2007. Please visit DPOR's website for more information.

To download a copy of the new Residential Property Disclosure Statement from the Fredricksburg Area Association of Realtors, click here.
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Courthouse Closings and the Regional Sales Contract

Now that it's November it's time to start focusing hard on the upcoming Holiday Season (although Retailers have been trying to get us to think about it since August). In addition to working on getting your holiday cards out, planning your holiday party schedule, and shopping, real estate agents should take note of the schedule of courthouse closings. Failing to do so could cost your Sellers hundreds and possibly thousands of dollars!

Why?

Remember, the Regional Sales Contract requires the Purchaser to deliver the required funds on the Settlement Date and the Seller to deliver possession of the property (including keys) at settlement. Virginia's Wet Settlement Act, however, requires the Settlement Agent to record the Deed and any Deeds of Trust prior to disbursing proceeds, including the Seller's proceeds and funds to payoff the Seller's mortgage.

When the Courthouse is closed, disbursements are necessarily delayed. For instance, if you were to settle on Friday afternoon on December 21 in Loudoun County, your seller would have to give over the keys but they wouldn't receive their funds and they would have to keep paying their mortgage interest until Thursday, December 27th! In all Northern Virginia localities the Grantor's Tax will be going up on January 1, 2008 as well. If you settle on and $800,000.00 home Friday, December 28th, your Deed won't be recorded until January 2, 2008, and your Seller will pay $4000.00 in Grantor's tax instead of $800.00.

What can be done to avoid this?

• Check the Settlement Date!
• Be aware that the Settlement Company has two business days after the scheduled closing to record.
• Talk to the Settlement Agent to see if they can do better.
• Be very wary of a Purchaser's promise to settle early in the morning to allow for same day recordation. As mentioned above, the Purchaser won't be in default if the funds arrive any time on the Settlement Date.
• Remind the Purchaser of their duty to provide cashier's checks or bank wired funds. Encourage them to take care of this the day before settlement, rather than the day of. Any delay will slow down the recordation and disbrusement process.

Below is the current closing schedule for Northern Virginia Jurisdictions. Keep in mind the schedules are subject to change. Where hyperlinked, you can click to go to the official site of the Clerk's office.

Alexandria (City): November 22, 23; December 24, 25; January 1, 18, and 21

Arlington County: November 22, 23; December 24, 25, 31; January 1, 18, and 21

Fairfax County: November 22, 23; December 24, 25, 31; January 1, 18, and 21

Loudoun County: November 22, 23; December 24, 25, 26; January 1, 18, and 21

Prince William County: November 22, 23; December 24, 25; January 1, 18, and 21


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