Preliminary contract, right of withdrawal and information note
Posted: Sun Dec 22, 2024 10:27 am
When you buy a residential building that has been built or will be built (condo, single-family or multi-family home, etc.) from a developer or builder, for your personal use, it is not a promise to purchase that must be signed, but a preliminary contract. This has mandatory content dictated by law in order to protect the buyer since he is entering into a contract with an expert seller. Consequently, if the developer has entrusted the sale of the units to a real estate broker and the latter presents you with a standard promise to purchase to make your offer, refuse to sign it and demand the correct document.
This preliminary contract includes the possibility of saudi-arabia business email list changing your mind within 10 days of signing the preliminary contract, a clause that is absent from standard promises to purchase. In legal terms, this is called the right to withdraw . Contrary to popular belief, the possibility of changing your mind and withdrawing from a purchase does not apply to all property purchases. For example, if you sell your family home, the promising buyer does not have the possibility of withdrawing from his offer two days later because he realized that he acted on impulse or on a whim! However, if this promising buyer had committed to a developer or builder, the preliminary contract would give him this right to change his mind. Be careful: this is not always done without fees, because the law allows the developer or builder to collect a penalty not exceeding 0.5% of the agreed sale price, if the penalty is provided for in the preliminary contract. Which is generally the case.
Furthermore, if you are buying a condo to live in, the preliminary contract must be accompanied by the information note . This contains a wealth of information about the project, including the names of the architects, engineers, builders, the overall plan of the project, the forecast budget, information on management, etc. In the past, the information note was too often not provided by the builder. This observation led the government to change the rules regarding the right to withdraw in order to better protect buyers. From now on, the 10-day period only begins to run after the information note is provided to the buyer.
In the preliminary contract, also pay special attention to the following two elements:
This preliminary contract includes the possibility of saudi-arabia business email list changing your mind within 10 days of signing the preliminary contract, a clause that is absent from standard promises to purchase. In legal terms, this is called the right to withdraw . Contrary to popular belief, the possibility of changing your mind and withdrawing from a purchase does not apply to all property purchases. For example, if you sell your family home, the promising buyer does not have the possibility of withdrawing from his offer two days later because he realized that he acted on impulse or on a whim! However, if this promising buyer had committed to a developer or builder, the preliminary contract would give him this right to change his mind. Be careful: this is not always done without fees, because the law allows the developer or builder to collect a penalty not exceeding 0.5% of the agreed sale price, if the penalty is provided for in the preliminary contract. Which is generally the case.
Furthermore, if you are buying a condo to live in, the preliminary contract must be accompanied by the information note . This contains a wealth of information about the project, including the names of the architects, engineers, builders, the overall plan of the project, the forecast budget, information on management, etc. In the past, the information note was too often not provided by the builder. This observation led the government to change the rules regarding the right to withdraw in order to better protect buyers. From now on, the 10-day period only begins to run after the information note is provided to the buyer.
In the preliminary contract, also pay special attention to the following two elements: