JIM FLYNN: Buyers have a few windows for remorse
A question regularly put to lawyers by people suffering buyer’s remorse goes like this: “Hey, lawyer. Do I have the right to cancel this purchase I just made (or contract I just signed)?”
The answer to this question is usually no, but there are exceptions. Here are the ones I know about. There may be others:
• Mortgage loans. Under the Federal Truth in Lending Act, someone borrowing money against a home, other than as part of a transaction involving the purchase of the home, has a three-business-day right to cancel the loan. This right lasts for three years if the lender did not properly disclose the terms of the loan.
• Door-to-door sales. Under a Federal Trade Commission rule, a home solicitation sale of $25 or more can be rescinded within three business days following the sale.
• Commercial telephone sales. Under the Colorado Consumer Protection Act (CCPA), purchases made over the telephone in response to an unsolicited call can be rescinded for up to three business days after receipt of the goods or services.
• Time shares. Under the CCPA, sellers of time shares must provide buyers with a five-calendar-day right to cancel the purchase.
• Health club memberships. People who sign health club membership contracts have three business days to cancel the contract. This law also allows for cancellation in the event of death or disability. Cancellation is also allowed if the club moves more than five miles away from the original location.
• Dance studio contracts. Under the CCPA, dance studio contracts can be canceled at any time. Upon cancellation, the dance studio must return that portion of the contract price already paid but not yet earned, less 10 percent of that amount.
• Buyers’ clubs. Purchasers of a buyers’ club membership costing $100 or more have until the close of business the next business day to cancel.
• Foreclosure consultants. A contract with a foreclosure consultant may be canceled at any time.
• Sale of home to “equity purchaser.” A contract to sell a home to an equity purchaser — someone who invests in homes in foreclosure — may be canceled up until midnight of the third business day following the contract date or noon on the day immediately preceding the foreclosure sale, whichever is earlier.
• Credit-repair contracts. Under the Colorado Credit Services Organization Act, a credit-repair contract may be canceled within five business days of the contract date.
• Charitable gifts. Under the Colorado Charitable Solicitations Act, there is a one-business-day right to rescind gifts of tangible personal property and a three-business-day right to rescind monetary pledges.
• Motor vehicle purchases. Contrary to popular belief, there is no right to rescind the purchase of a motor vehicle, unless the seller has a business policy allowing for such.
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Jim Flynn is a private attorney
at Flynn Wright & Fredman LLC in Colorado Springs. Reach him at
jtflynn@fwflegal.com.
