The requirements for a valid Tender Offer Statement are found in Nevada Revised Statutes 116.4100 et seq. entitled “For the Protection of Buyers”. Under NRS 116, et seq., sellers of unbuilt condominiums must provide a prospective buyer with a Public Offering Statement, which must meet the requirements of NRS 116, et seq. In the event that a Public Offer Statement is not provided to prospective buyers prior to purchasing an unbuilt condominium unit, then the buyer is entitled to rescission and/or other remedies, as follows:
NRS 116.4108 Buyer’s right to cancel.
1. A person required to deliver a tender offer statement pursuant to subsection 3 of NRS 116.4102 shall provide the purchaser with a copy of the current tender offer statement no later than the date an offer to purchase becomes binding on The buyer. Unless the buyer has personally inspected the unit, the buyer may cancel, by written notice, the purchase contract until midnight of the fifth calendar day following the date of execution of the contract, and the purchase contract must contain a provision to that effect. .
2. If a buyer elects to cancel a contract pursuant to subsection 1, he may do so by personally delivering notice to the offeror or by sending notice by United States mail prepaid to the offeror or his agent for service of process. Cancellation is without penalty and all payments made by the buyer prior to cancellation must be refunded immediately.
3. If a person required to deliver a tender offer statement pursuant to subsection 3 of NRS 116.4102 fails to provide the purchaser to whom a unit is transferred with a current tender offer statement, the purchaser is entitled to actual damages, rescission or other type of repair. but if the buyer has agreed to the disposal of the unit, he has no right to rescission.
The unbuilt condos look like unregistered values. While unbuilt condominium units are classified as real estate interests, they are not like ordinary parcels of real estate that can be personally developed, managed, and improved, and for this reason are often viewed as equity-like, requiring the register values due to dependency. on the management of third parties that are responsible for the rise or fall of the investment. In this regard, unbuilt condominium units have often been said to be a hybrid interest, requiring more disclosure than the sale of a parcel of land that can be inspected. When unbuilt condominium units are sold as “investments,” they come even closer to being an unregistered value than a typical real estate interest.
Recognizing the need to protect unsophisticated buyers of greenfield condominium units, federal and state laws were enacted to protect involuntary buyers from condominium developers with superior bargaining power, sophisticated experience, and binding contracts.
NRS 116, Section 4101, et seq. it is titled For the Protection of Buyers. Clearly, these provisions are important and developers must comply with them. When they do not comply it is at their own risk, because buyers can terminate. These provisions appear to acknowledge the dual, if not hybrid, nature of a greenfield condominium unit, and appear to be offered to the public rather than requiring securities registrations for greenfield condominium units.
The federal government has also recognized an important need to regulate sellers of unbuilt condominium units and the result was the passage of the INTERSTATE LAND SALES FULL DISCLOSURE ACT, which requires sellers to provide adequate disclosure, including Property Reports and Public Offering Statements, unless exempt. The most common exemption is sought by developers who maintain that they do not have to comply with the ILSFDA if they make an unconditional commitment to build the units in question within 24 months of signing a purchase agreement. Developers often assume they are entitled to the 24-month waiver and therefore fail to provide the required disclosure, only to find out later that they were unable to complete and deliver the unit in question within 24 months as promised. . This situation gives rise to litigation, in which purchasers of unbuilt units are allowed to rescind in the event that the developer has not submitted the Tender Offer and Ownership Report and does not have a valid exemption.
Buyers of unbuilt condo units need to be careful because many times they are buying a unit that will not be built within 2 years, if ever. If the developer promises to deliver within 24 months but fails to do so, the developer most likely also failed to provide a full disclosure under ILSFDA without a proper waiver and the buyer is entitled to rescind and receive a full refund of all guarantee money. deposits. If the developer is in financial trouble, as is often the case, and the development is executed or purchased, there are other grounds for termination as well. In such cases, a buyer should contact an attorney who is an expert in these mysterious and often contradictory and confusing areas of the law.