§ 5-10-070 — Financial assurances; deposit

5-10-070 Financial assurances; deposit.

The owner may not require the tenant association or tenant(s) under Section 5-10-060(b)(3) to prove financial ability to perform as a prerequisite to entering into a contract. However, in a rental property of four units or fewer, the tenant association, tenant(s) under Section 5-10-060(b)(3), or assignee under Section 5-10-080 shall provide the owner with a preapproval letter from a lender to validate borrower capability to pay the mortgage. The owner shall not require the tenant association or tenant(s) under Section 5-10-060(b)(3) to pay a deposit of more than 5 percent of the contract sales price in order to make a contract. The owner must refund the deposit in the event of a good faith failure of the tenant association to perform under the contract. (Added Coun. J. 9-9-20, p. 20074, § 10; Amend Coun. J. 9-15-25, p. 31868, § 7)