Recently, Christian received an email from a local attorney forwarding a case discussing the significance of condominium receipts. Rustbrook—S.C.B. (U.S.), Inc v Sauermann, 460 So.2d 386 (Fla. 2 DCA 1984).
The case confirmed that receipt of the condominium documents started the statutory clock for cancellation of the contract, not the execution of the receipt. Mr. Sauermann testified that he received his condominium documents, but never signed a receipt. He then tried to cancel his 2 contracts, and demanded a refund of his deposits. The developer refused.
The court ruled that Mr. Sauermann could not cancel his contracts (again, no receipt) and receive a refund of his deposits. His failure to sign a receipt did not matter. Receipt of the documents mattered. The court then stated:
“Whether or not the buyer signed a receipt for the documents is irrelevant to the purpose of the fifteen-day period.”
The court referred to the receipt as an “evidentiary aid”.
But the receipt is still important, evidentiary aid or not. Any Buyer would have a difficult time overturning a signed receipt. Various legal theories come into play such as estoppel (the Seller’s reliance to his detriment). Bottom line, I could not find one Florida case (in the last 38 years) that gave the Buyer more time to cancel after signing a receipt, and letting the review period expire.
So, what should a Realtor do regarding condominium receipts? Our article from October 2020 (Link Here) discusses this matter in depth.
- If your customer is the Seller, get the receipt signed as quickly as possible;
- If your customer is the Buyer, verify that the documents are complete prior to signing;
- Verify that the Selling Agent or Attorney has delivered the documents to the Buyer. Delivery of the condominium documents to the Buyer’s broker or attorney is not delivery to the Buyer (See Standard Q, NABOR);
- Do not deliberately delay delivering documents to a Buyer in attempts to gain an advantage for them. A court could easily discover this subterfuge to the Buyer’s detriment.
For those with an interest in local history, the Sauermann case involved the Seawinds condominium on Marco Island. Read this federal appellate case and a related newspaper article for the details (link here). Though the case touches on the deposit, the backstory also involved mortgage fraud and several parties were indicted, likely why Suaermann pushed so hard to get the deposits back.
My conclusion? Be honest (with your lender…Realtor…Client…Attorney…), or suffer the consequences!
As you determine what is right for you and your clients, do not hesitate to reach out to our office for legal advice and to schedule your closing – we would be honored to help. We hope that you enjoyed these articles. If you should have any questions, please don’t hesitate to contact us directly!