“Get Me Out of the Deal!”: Statutory Cancellation for Beginners

 

“Subject to” . .  “Statutory” . .  . “Cancellation” . . . Huh?!?

[Editor’s Note:  In addition to “statutory cancellation,” there is another legal status called “subject to statutory Rescission.”  At least in Minnesota, purchasers of condo’s and townhomes have a 10 day right to rescind while they review the related Association disclosures.   While that 10-day period is running, the convention is to disclose on MLS that “An Offer Has Been Accepted Upon:  Subject to Statutory Rescission.”]

Once in awhile, Buyers will encounter a home that can only be sold “subject to statutory cancellation.”

What does that mean?

The home in question has been the subject of a first deal that went south, and the Buyer and the Seller are now fighting over the earnest money.

You know that because one of the parties refused to sign a “Cancellation of Purchase Agreement,” which allows the Buyer to make offers on other properties, and for the Seller to entertain other offers.

In other words . . . for everyone to move on (yes, including the Realtors!).

Send in the Clowns Lawyers

When that happens (which is not often), either party can hire a lawyer and seek what’s called a “statutory cancellation” — a fancy term for getting a court to step in and cancel the contract when a recalcitrant Buyer or Seller won’t.

Usual timetable:  about 2 weeks.

Cost:  around $1,000.

Without knowing any more details, all you can really infer are that:  a) the original deal had a major issue (or several); and b) the Seller and Buyer are at an impasse (to put it politely).



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