July 6th, 2020 at 12:48 pm
Multiple Choice Question: Under the TDS law, the buyer has a 5-day right to cancel upon delivery of the TDS by email. In this situation, on what day does the buyer’s 5 days begin to run? Pick the best answer:
A. July 6.
B. July 12.
C. When the buyer’s agent delivers the TDS and AVID to the buyer.
D. When the buyer’s agent fills in Section IV of the TDS, and delivers the TDS and 2 AVIDs to the buyer.
Answer: Answer A is wrong. The TDS law, as recently revised effective January 1, 2020, states that a buyer’s right to cancel does not begin unless the seller and listing agent complete Sections I, II, and III of the TDS. The checkbox in Section III states ”See attached Agent Visual Inspection Disclosure (AVID Form).” If the listing agent checks that box and delivers the TDS to the buyer’s agent on July 6, but does not attach the AVID, Section III is not complete and the buyer’s 5-day right to cancel has not yet commenced. Even if the listing agent wrote instead that “AVID to follow,” Section III is arguably incomplete until delivery of the AVID itself.
Answer B is the correct answer. If the listing agent waits until July 12 to provide the AVID as referenced in Section III of the TDS, that would be the day that the buyer’s 5-day right to cancel begins.
Answer C is wrong. The revised TDS law states that the buyer’s right to cancel begins when the completed TDS is delivered to either the buyer or buyer’s agent.
Answer D is wrong. A buyer’s agent is required to complete Section IV of the TDS. However, Section IV need not be completed to start the buyer’s 5-day right to cancel. Otherwise, a buyer’s agent could intentionally stall the completion of Section IV in an effort to preserve the buyer’s 5-day right to cancel.
Listing Agents Beware! Do your best to deliver your completed AVID at the same time as the seller’s TDS. Otherwise, you may inadvertently give the buyer more time to exercise his or her right to cancel under the TDS law.
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