Condo Hotel Rescission Period

Q: I've heard mention of a rescission period that applies when you purchase condo hotel units. Does it apply to all condo hotels? Can you explain how it works?

A: The rescission period does apply to every condo hotel unit purchase in the state of Florida, regardless of the condo hotel property. That's because there's a Florida state law that gives buyers a cooling-off period, to back out of the contract and receive their deposit back in full.

If buying from the developer, the rescission period is 15 days. In the case of a resale, the rescission period is 3 days, beginning after the buyer has received the condo hotel documents. Most other states have similar laws.

What's interesting is how buyers have begun to find ways to use that rescission period to their benefit when it comes to reserving "hot properties." Let me explain.

Many of the premier condo hotels in Miami Beach are on the verge of selling out. I've had several clients from out of state who were interested in obtaining units before they sold out but were unable to get to Florida right away. To reserve the units they wanted, they put down the deposit and signed the necessary agreement, essentially buying the property site unseen. Then within the 15-day rescission period, they were able to come to Florida and view the unit they'd purchased. Had they waited, the units would have been gone.

In the cases I've seen, the clients were pleased with what they saw and did not ask to cancel their contracts, but I'm sure they appreciated knowing that they had that option open to them.

The above question was submitted via e-mail by a visitor to www.condohotelcenter.com. The answer was prepared by Joel Greene, a licensed real estate broker with Condo Hotel Center which specializes in the sale of condo hotel units and fractional ownerships in private residence clubs.