Condominium ownership is a unique real estate transaction and a relatively new one. The first registered condominium project was built in Salt Lake City, Utah in 1960. While people have been buying, selling, and taking real estate from each other since forever, the condominium ownership idea is in its infancy in Wisconsin. For more information please see these links: http://www.kerkmandunn.com/files/WisconsinCondominiumLaw.pdf and
Real estate contracts are intended to be specific and unambiguous. That’s helpful so one party can hold the other party accountable. The lawyers tell us that terms which are subject to one party’s approval on subjective terms or no conditions does not a valid contract make. Well, the Wisconsin Condominium Offer to Purchase has a full page of ambiguity. Page 4 of the Offer is one enormous escape hatch. Change of heart, cold feet, found something better, decided not to own, regardless of the reason, the buyer of a Wisconsin condominium can rescind the Offer within 5 business days of receipt of the condominium disclosure materials (all or some).
Disclosure Materials. More Required Than Meets the Eye
At first glance we see a list of items A through H to be provided. Eight items appear to be required. Start reading the itemized list and you see 8 increases exponentially. I stopped counting at 20 and that doesn’t include additional docs if the condo is a conversion project.
And the Important Stuff is Not Required
Records of Association meetings, financial statements, statement of reserve account, certificate of insurance, budget, unpaid special assessments… are a few of the items you’d think a buyer should see to know what kind of club their joining. You have to ask for these. Cool thing about the Wisconsin real estate contracts is that they creators wrote in suggestions on how to fill out the forms. In this case they tell you to write the additional items the buyer wants on the lines for additional provisions. Brilliant.
Seller Should Know What Exists Before They Commit
The owner who takes the time to gather the disclosure materials before buyers come to see the property will know what they can promise to provide. Because the Offer assumes the seller knows what exists the contract does not provide a solution for the Seller to turn to if they accept the Offer and can’t provide some of the items they agreed to provide. The Buyer has a solution, they can rescind the Offer or make a request for documents they did not receive. The exit door is obviously wide open when Sellers make promises they can’t keep.
- Before the property goes on the market, use the Offer to Purchase form, page 4 of 9 as your checklist guide. Gather everything on that list. Check off each items to make sure nothing is missed. Create an electronic file of the Condominium Disclosure Materials. Create a Disclosure for the Buyer to include in the Offer which states they have received these documents on the date they submitted the Offer, or a statement which lists the documents they have not received.
- Review all Offers to make sure there are no changes to the standard offer terms of the disclosure material contingency on page 4.
- Find out if any of the suggested Additional Condo Issue materials are requested by scouring the Offer.
- If the Offer includes an addendum modifying the standard offer disclosure document contingency, discuss the merits of deleting that addendum from the Offer.
- Notice the delivery to buyer requires Actual Receipt. Make sure the Offer has a buyer delivery method, and delivery to agent or lawyer is NOT actual receipt by Buyer.
- Make it easier for Seller to comply with the requirements. Make sure the Buyer gets what they want and ideally they get everything at once.