Right To Rescind Condo Contract After Delays & Operating Budget Increase

Below is an excerpt from ’13 NYCRR Section 20.3: Format and content’ concerning condo purchase contract recision due to operating budget increases.

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(h) Budget for first year of condominium operation (schedule B). The plan must describe all projected income and expenses for the first year of condominium operation in schedule B.

(1) The budget shall be based upon a specified 12-month period to commence on the date when it can reasonably be projected that condominium operations will begin and no sooner than six months after the submission of the offering plan for filing. When calculating the projection, include sufficient time to arrange for the closings. If the actual or anticipated date of commencement of condominium operation is to be delayed more than six months from the budget year projected in the offering plan, the plan must be amended to include a revised budget disclosing current projections. If such amended projections exceed the original projections by 25 percent or more, the sponsor must offer all purchasers the right to rescind and a reasonable period of time that is not less than 15 days after the date of presentation to exercise the right, whether or not sponsor offers to guarantee the previous budget projection. Sponsor must return any deposit or downpayment to purchasers who rescind within a reasonable period of time. Sponsor may not declare a plan effective where there are any material changes to the budget if these changes have not been disclosed by a duly filed amendment to the offering plan.

The complete text is here: https://ag.ny.gov/sites/default/files/13_nycrr_20_3.pdf