Variations May Be Necessary In New Construction

Q: I signed a contract to purchase a new condo unit being built. A major selling feature for my unit was the large ground floor patio. The salesman said my patio could even be larger than the one shown on the plans.
 

I signed a contract and put down $15,000. After I did this, the builder changed the plan and reduced my patio by 30 percent with common area planters that come to within 6 inches of my side windows. The builder refuses to alter this new plan.

So, I requested a full refund of my deposit. He says I must forfeit it as I agreed to "variations may be necessary" in the contract. I contend this was a major change not a variation, as this was considered a major selling feature of the property.

Is there law to protect me from this material change and "devaluation" of the property to force a refund? Thank you.

A: The time to have made sure that the contract protected you in case anything like this situation came up was before you signed it.

One of the things that a real estate attorney does is to look through a new construction contract and make sure you're protected and that you thoroughly understand the language.

Typically, new construction contracts are written by the developer and for the developer. That means they're heavily slanted to favor the developer in all situations, including the product specifications (unless your specs are listed in your contract), delivery date, and variations in the lot and house configurations.

It would have been a smart move to have checked out this builder thoroughly by interviewing folks who own homes in this development and other developments he has built through the years. Asking how the developer was to deal with on a business level, and what kind of product he delivered, and how that house has held up over time would have given you unique insights into who you were dealing with.

You're in a tough spot now and the developer holds all the cards -- and your $15,000.

If you had an attorney look over the agreement before you signed it, please call that attorney and ask for guidance. If not, I suggest you call your local bar association to find a good local real estate attorney who has had plenty of experience in new construction contracts or real estate litigation, and can help you explore your legal options.

To answer your direct question, in some states a major change in the configuration of the unit may be sufficient cause to allow you to terminate the contract. Whether the change in the patio area is sufficient to fall within that category will depend on your state’s laws. It would be best for you to sit down and talk to a real estate litigator about whether this change constitutes a major change as defined by your state’s laws.

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