If the builder didn't fully disclose the terms, can I back out of buying the home?June 20, 2012: 9:00 AM ET
We were buying a home, but the builder didn't disclose the limits on renting. Can we get our deposit back?
—L.Y., Allen, Texas
Yes, if time and paperwork are on your side. A rental limit set by a builder or homeowners association is material information that a seller is obligated to disclose, says San Antonio attorney Bryan Woods. If you never got the applicable covenants, conditions, and restrictions, you should be able to cancel the contract and get your money back, he says. If you got the CC&Rs but missed the rental rule, or if you've already bought the home, you're out of luck.
Some states specifically require CC&R disclosures and give buyers time to cancel in response, says Peter Dunbar, co-author of The Homeowners Association Manual. Similar rules may be in a sales contract. In general, though, "Buyer beware," he says. "You need to ask about any restrictions."
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