PRINTER'S NO. 1479
No. 1253 Session of 2005
INTRODUCED BY TIGUE, GRUCELA, CAWLEY, CALTAGIRONE, CORRIGAN,
HALUSKA, McGEEHAN, MUNDY, READSHAW, REICHLEY, SATHER,
SCAVELLO, THOMAS, E. Z. TAYLOR AND WALKO, MARCH 31, 2005
REFERRED TO COMMITTEE ON COMMERCE, MARCH 31, 2005
AN ACT
1 Amending Title 68 (Real and Personal Property) of the
2 Pennsylvania Consolidated Statutes, providing for a right of
3 cancellation in agreements for a residential real estate
4 transfer.
5 The General Assembly of the Commonwealth of Pennsylvania
6 hereby enacts as follows:
7 Section 1. Title 68 of the Pennsylvania Consolidated
8 Statutes is amended by adding a section to read:
9 § 7104. Right of cancellation.
10 (a) General rule.--Either party to an agreement for a
11 residential real estate transfer may avoid the agreement by
12 notifying, in writing, the other party within three full
13 business days following the day on which the agreement was made.
14 Such notice shall be effective upon depositing the same in the
15 United States mail or upon other service which gives the other
16 party the notice.
17 (b) Disclosure.--At the time of execution of the agreement,
18 the buyer shall be provided with:
1 (1) A fully completed receipt or copy of the agreement
2 for the residential real estate transfer, which is in the
3 same language as that principally used during the negotiation
4 of the sale and also in English, and which in addition to any
5 other provisions required by law, contains the following
6 statement in immediate proximity to the space reserved in the
7 contract for the signature of the buyer and the seller, which
8 statement shall appear in bold face type of a minimum size of
9 ten points:
10 Either the buyer or the seller may cancel this
11 transaction at any time prior to midnight of the third
12 business day after the date of this transaction. This
13 agreement will be legally binding at the end of the
14 three-day period unless it is canceled according to the
15 notice of cancellation. See the attached notice of
16 cancellation form for an explanation of this right.
17 (2) A completed form in duplicate, captioned "Notice of
18 Cancellation," which shall be attached to the agreement and
19 easily detachable, and which shall contain in ten-point bold
20 face type the following information and statements in the
21 same language as that used in the agreement:
22 Notice of Cancellation
23 (Enter Date of Transaction)
24 You may cancel this transaction, without any penalty
25 or obligation, within three business days from the above
26 date. You count three days from the date of delivery of
27 the signed agreement to the buyer from the seller. You do
28 not count Saturdays, Sundays or legal holidays. The buyer
29 and the seller may agree in writing to extend the three-
30 day period for attorney review of the agreement.
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1 If the buyer cancels, any payments made by the buyer
2 under the agreement and any negotiable instrument
3 executed by the buyer will be returned to the buyer
4 within ten business days following receipt by the seller
5 of the cancellation notice.
6 If the seller cancels, the seller shall not be
7 legally obligated to sell the residential real estate to
8 the buyer.
9 If an attorney for the buyer or the seller reviews
10 and disapproves of this agreement, the attorney must
11 notify the other party to the agreement and the brokers
12 within the three-day period. Otherwise, the agreement
13 will be legally binding as written. The attorney may, but
14 is not required to, inform the broker of the reason or
15 reasons why the agreement is unsatisfactory and of any
16 suggested revisions in the agreement that would make it
17 satisfactory to the party exercising its right to cancel.
18 (c) Duty to inform.--
19 (1) The seller shall inform each buyer at the time that
20 buyer signs the agreement of the right to cancel. The
21 cancellation period provided for in this section shall not
22 begin to commence until the buyer has been informed of the
23 right to cancel and has been provided with a copy of the
24 "Notice of Cancellation."
25 (2) The seller may not misrepresent in any manner the
26 buyer's right to cancel.
27 (d) Effect of valid notice of cancellation.--Any valid
28 notice of cancellation by a buyer or seller shall be honored by
29 the other party. For a valid notice of cancellation made by a
30 buyer, the seller shall, within ten business days of the notice,
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1 refund all payments made under the agreement and cancel and
2 return any negotiable instrument executed by the buyer in
3 connection with the agreement and take any action necessary or
4 appropriate to terminate the transaction.
5 Section 2. This act shall take effect in 60 days.
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