A Preliminary Reservation Agreement is not a Purchase Agreement.
Rather, it is a short, simple agreement which gives you the opportunity to enter into a Purchase Agreement for a particular unit in a condominium building at a later date, thus assuring you that your unit of choice will not be offered to anyone else during the reservation period.
It’s important to know that all condominiums in Michigan are governed by the Michigan Condominium Act (“The Act”) which requires that a reservation deposit must be placed into an escrow account with an escrow agent and must be refunded should you wish to cancel the Preliminary Reservation Agreement. Furthermore, our agreements state that you may cancel anytime during the reservation period – for any reason.
Among other things, the Act also requires that, at the time of entering into a Purchase Agreement, purchasers must receive copies of certain documents pertinent to the condominium, including the Master Deed and Bylaws.
In the case of condominiums that are being newly constructed or are in buildings that are being converted into condos (as is the case of West Bank Lofts), developers may not offer units for sale until the Master Deed and Bylaws are recorded and available for purchasers’ review.
However, the Act enables developers to offer units to be reserved after they comply with certain other provisions.
It is during this period – after complying with certain provisions but before recording the Master Deed and Bylaws - that developers may use Preliminary Reservation Agreements and prospective purchasers can be assured that their unit of choice is available.
Once the Master Deed and Bylaws are recorded and made available, purchasers and developers may then enter into formal purchase documents and any deposit made under the Preliminary Reservation Agreement must be credited toward any payment due under the Purchase Agreement.
In summary, Preliminary Reservation Agreements are a great way to secure your favorite unit in West Bank Lofts!
For additional information, please call Betsy de Parry at (989) 522-0202.