Real Estate Law Update: New Requirements for Residential Developers
July 15, 2010
Publication| Real Estate Services
On June 10, 2010, Governor Markell signed into law two bills that have a significant effect on developers of residential communities in Delaware. The first, House Bill 321, expands existing law that prohibits a developer from collecting fees for a community amenity that is not yet completed and available for residents’ use. The bill extends this prohibition to homeowners associations and similar entities, and applies the prohibition to all amenities in the community even if some have been completed and are available for use, unless the fees are differentiated on an itemized basis. The bill also makes the violation of this law a violation of consumer law, enforceable by the Attorney General.
The second bill, House Bill 320, requires that a new home seller deliver to the buyer, on or before the date the contract of sale of a new home is delivered to the buyer, copies of all documents in the chain of title for the house that create any financial obligation for the buyer, together with a written summary of the financial obligations created by those documents. The seller must obtain from the buyer written acknowledgment that the buyer has received these documents. In order to provide time for the Delaware Real Estate Commission to develop forms of documents that a seller must use for disclosing the required financial information, the act will not become effective until January 1, 2011. Violation of this law is a violation of consumer law, enforceable by the Attorney General. The act does not apply to transactions in which the seller has provided the buyer either a public offering statement or a resale certificate required under the Delaware Uniform Common Interest Ownership Act.