Use a Cancellation Notice or Release and Cancellation Form?
Some buyers assume they can cancel a contract by sending a Florida Realtors form Release and Cancellation to the seller or seller’s representative. However, their assumption misses some key contractual provisions regarding notice.
ORLANDO, Fla. – Before we get into the details, this article is very narrow. It’s more of a best practice tip as opposed to a discussion about a black and white rule. We’ll look at one specific notice provision in the Florida Realtors/Florida Bar “AS IS” Residential Contract for Purchase and Sale and contrast that cancellation language with language in the Florida Realtors form Release and Cancellation.
Let’s start by reviewing how a buyer can cancel a Florida Realtors/Florida Bar “As Is” contract during the inspection period. Section 12 provides “Buyer may terminate this Contract by delivering written notice of such election to Seller prior to expiration of Inspection Period.”
There’s a little more detail about notices in Section 18, Standard O. “All notices must be in writing and may only be made by mail, facsimile transmission, personal delivery or email.” Standard O also answers the question of who can give the notice, in addition to the buyer. “Notice and delivery given by or to the attorney or broker (including such broker’s real estate licensee) representing any party shall be as effective as if given by or to that party.”
In plain language, these sections simply describe a letter or email that conveys a message. I am not aware of any “fill in the blank” form notices available to real estate licensees across Florida, so a buyer would typically need to come up with their own words. A simple notice might look something like this, although there could be any number of shorter or far-longer variations.
Dear Seller, I’m writing to cancel the contract to purchase 710 Ashbury Street. I’m exercising my right to cancel in Section 12, since I am not satisfied with the property. Now that the contract is terminated, please sign and return the attached release and cancellation at your earliest convenience. Sincerely, Buyer.
So, what is a form Release and Cancellation? It’s a document that becomes effective once the buyer and seller both sign it. The side who receives an offer signed by the other is welcome to accept, reject, counter, or ignore the offer. If you look carefully at the first sentence, this should be clear: “By signing this RELEASE AND CANCELLATION OF CONTRACT (“Release”), [Buyer] and [Seller] are cancelling the following contract …”
See the difference? The contract provides that the contract is canceled after only one side (the buyer) delivers a written notice, which may or may not be signed. The release and cancellation, however, provides that the underlying purchase and sale contract is canceled after both sides (buyer AND seller) have signed the form.
Now, for a little bit of nuance. I started by saying this was more of a best practice discussion. Note that the contract language merely requires “written notice of such election [to cancel].” Let’s say a buyer sends this message: “I’m cancelling. Please sign the attached release and cancellation.” Does that very brief two-word message work? Arguably so. It’s not nearly as clear as the more detailed notice above, but it does leave room for a seller to question the message. Why are you cancelling? Is it based on the inspection period, financing contingency, or something else? It isn’t clear.
What if there is simply an email from the buyer to the seller with a release and cancellation signed by the buyer attached to the email, with the subject line reading, “Please sign and return”? That would be trickier, and a seller could certainly argue that the release and cancellation, with no further detail given, is simply an invitation for the seller to cancel. That would ultimately be a question for a court to analyze if a buyer and seller can’t agree to settle the issue.
On that cheerful note, stay safe out there. Hopefully parties exercising cancellation rights can clearly express themselves when giving important notices that change their legal rights and obligations, and avoid unnecessary bickering or disputes.
Joel Maxson is Associate General Counsel for Florida Realtors
Note: Information deemed accurate on date of publication
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