Attached residential condominium sales: liquidated damages.
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Majority
Fiscal committee
No
Appropriation
No
Current location
Judiciary
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes the rules for liquidated damages in attached residential condominium sales. It increases the maximum percentage of the purchase price that can be considered liquidated damages from 3% to 10%. Specifically, for newly constructed condominium units in structures with 10 or more units, the seller must provide an accounting of costs and revenues within 60 days of the sale and refund any excess liquidated damages, up to the greater of 10% of the original purchase price or the seller’s actual losses. This aims to provide more clarity and fairness in these types of transactions.
Key provisions
- Increases the maximum liquidated damages percentage from 3% to 10% for newly constructed attached condominium units.
- Requires sellers of attached condominium units (10+ units) to provide an accounting of costs and revenues within 60 days of a buyer’s default.
- Allows refunds of excess liquidated damages up to the greater of 10% of the original purchase price or the seller’s actual losses.
- Defines ‘structure’ as improvements constructed on a common foundation or by the same owner.
- Establishes criteria for a ‘new qualified buyer’ to trigger a shortened accounting timeline.
- Specifies that the reasonableness of liquidated damages should consider circumstances at the time of contract and subsequent sales.
- Addresses accounting requirements if a new qualified buyer enters into a contract.
- Clarifies that the accounting does not apply to disputes about the reasonableness of liquidated damages.
Bill text
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