Real estate transactions often represent significant investments. In Guam, as elsewhere, entering into a real estate contract is a serious matter with legal implications. But what happens if you begin the process and then change your mind? Perhaps you discover something about the property that gives you pause, or you find something that better fits your needs. Is it possible to get out of the agreement?
In some cases, it is. The following provides basic information to help you get a better understanding of how the law works in these situations.
#1: Review the contract
The answer is often in the language of the contract. Ideally, you were able to negotiate a contract that fits your needs instead of using a boilerplate, fill-in-the-blank, pre-prepared document. If you tailored the agreement to your specific transaction, the contract will likely include language to protect your interests. However, even if you used a preexisting document, there is still the chance that a provision will provide a path for relief.
When reviewing the contract, look for contingencies. The use of contingencies soared during the pandemic. Although not a new thing in real estate contracts, the pandemic triggered buyers and sellers to call for additional protection when negotiating a real estate contract. Examples of common contingencies include having the purchase contingent upon:
- The current owner finding another home,
- Results of home inspection, and
- Financing.
These contingencies serve to mitigate the risks of the deal for the buyer and/or seller.
Review the contingencies included in the contract to see if any apply to your situation. If so, they could serve as the “get out of jail free” card you need to cancel the transaction.
#2: Legal hurdles
In some cases, local laws and regulations may allow for contract cancellation. This could include cases of misrepresentation, an agreement by one party without the consent of their spouse, or an agreement where the party making the offer has no power to lawfully do so.
Cancelling a real estate contract in Guam requires careful consideration of the contract terms and legal statutes. While buyers have certain rights, exercising these rights often depends on specific circumstances outlined within the contract or provided by law.