Article 004 : Protection of Purchasers

V.S.A. tit. 27A, ch. 4

in effect

27A V.S.A. § 4-101 Waiver

4-101. Waiver (a) This article applies to all units subject to this title, except as provided in subsection (b) of this section or as modified or waived by agreement of purchasers of units in a common interest community in which all units are restricted to nonresidential use. (b) Neither a public offering statement nor a resale certificate need be prepared or delivered in the case of: (1) a gratuitous disposition of a unit; (2) a disposition pursuant to court order; (3) a disposition by a government or governmental agency; (4) a disposition by foreclosure or deed in lieu of foreclosure; (5) a disposition to a dealer; (6) a disposition that may be canceled at any time and for any reason by the purchaser without penalty; (7) a disposition of a unit restricted to nonresidential purposes. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-102 Liability for public offering statement requirements

4-102. Liability for public offering statement requirements (a) Except as otherwise provided in subsection (b) of this section, a declarant shall prepare a public offering statement conforming to the requirements of sections 4-103, 4-104, 4-105, and 4-106 of this title before offering any interest in a unit to the public. (b) A declarant may transfer responsibility for preparation of all or a part of the public offering statement to a successor declarant or to a dealer who intends to offer units in the common interest community. In the event of any such transfer, the transferor shall provide the transferee with any information necessary to enable the transferee to fulfill the requirements of subsection (a) of this section. (c) Any declarant or dealer who offers a unit to a purchaser shall deliver a public offering statement in the manner prescribed in subsection 4-103(a) of this title. The declarant who prepared all or a part of the public offering statement is liable under section 4-117 of this title for any false or misleading statement stated in it or for any omission of material fact therefrom. (d) If a unit is part of a common interest community and is part of any other real estate regime in connection with the sale of which the delivery of a public offering statement is required under the laws of this state, a single public offering statement conforming to the requirements of sections 4-103, 4-104, 4-105, and 4-106 of this title, as they relate to each regime in which the unit is located, and to any other requirements imposed by law may be prepared and delivered in lieu of providing two or more public offering statements. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 43, eff. Jan. 1, 2012.

27A V.S.A. § 4-103 Public offering statement; general provisions

4-103. Public offering statement; general provisions (a) Except as otherwise provided in subsection (b) of this section, a public offering statement shall contain or fully and accurately disclose all the following: (1) The name and principal address of the declarant and of the common interest community, and a statement that the common interest community is either a condominium or planned community. (2) A general description of the common interest community, including to the extent known, the types, number, and declarant’s schedule of commencement and completion of construction of buildings, and amenities that the declarant anticipates including in the common interest community. (3) The number of units in the common interest community. (4) Copies and a brief narrative description of the significant features of the declaration, other than any plats and plans, and any other recorded covenants, conditions, restrictions, and reservations affecting the common interest community; the bylaws and any rules or regulations of the association; copies of any contracts and leases to be signed by purchasers at closing; and a brief narrative description of any contracts or leases that will or may be subject to cancellation by the association or managing entity under section 3-105 of this title. (5) The financial information required by subsection (d) of this section. (6) Any services not reflected in the budget that the declarant provides, or expenses that the declarant pays, and that the declarant expects may become a common expense of the association and the projected common expense assessment attributable to each of those services or expenses for the association and for each type of unit. (7) Any initial or special fee due from the purchaser or seller at the time of sale and a description of the purpose and method of calculating the fee. (8) A description of any liens, defects or encumbrances on or affecting the title to the common interest community. (9) A description of any financing offered or arranged by the declarant. (10) The terms and significant limitations of any warranties provided by the declarant, including statutory warranties and limitations on the enforcement thereof or on damages. (11) A statement of any unsatisfied judgments or pending suits against the association and the status of any pending suits material to the common interest community of which a declarant has actual knowledge. (12) Any restraints on alienation of any portion of the common interest community and any restrictions: (A) on use, occupancy, and alienation of the units, and (B) on the amount for which a unit may be sold or on the amount that may be received by a unit owner on sale, condemnation, or casualty loss to the unit or to the common interest community, or on termination of the common interest community. (13) A description of the insurance coverage provided for the benefit of unit owners. (14) Any current or expected fees or charges to be paid by unit owners for the use of the common elements and other facilities related to the common interest community. (15) The extent to which financial arrangements have been provided for completion of all improvements that the declarant is obligated to build pursuant to section 4-119 of this title. (16) A brief narrative description of any zoning and other land use requirements affecting the common interest community. (17) All unusual and material circumstances, features, and characteristics of the common interest community and the units. (18) A description of any arrangement described in section 1-209 of this title that binds the association. (b) If a common interest community composed of not more than four units is not subject to any development rights and no power is reserved to a declarant to make the common interest community part of a larger common interest community, group of common interest communities or other real estate, a public offering statement need not include the information otherwise required by subdivisions (a)(4), (9), (10), (15), (16), and (17) of this section. (c) A declarant shall promptly amend the public offering statement to report any material change in the information required by this section. (d) The public offering statement must contain any current balance sheet and a projected budget for the association, either within or as an exhibit to the public offering statement, for one year after the date of the first conveyance to a purchaser, and thereafter the current budget of the association, a statement of who prepared the budget, and a statement of the budget’s assumptions concerning occupancy and inflation factors. The budget must include: (1) a statement of the amount, or a statement that there is no amount, included in the budget as a reserve for repairs and replacement; (2) a statement of any other reserves; (3) the projected common expense assessment by category of expenditures for the association; and (4) the projected monthly common expense assessment for each type of unit. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 44, eff. Jan. 1, 2012.

27A V.S.A. § 4-104 Common interest communities subject to development rights

4-104. Common interest communities subject to development rights If the declaration provides that a common interest community is subject to any development rights, the public offering statement shall disclose, in addition to the information required by section 4-103 of this title: (1) the maximum number of units and the maximum number of units per acre that may be created; (2) how many or what percentage of the units that may be created will be restricted exclusively to residential use, or a statement that no representations are made regarding use restrictions; (3) if any of the units that may be built within real estate subject to development rights are not to be restricted exclusively to residential use, a statement, with respect to each portion of that real estate, of the maximum percentage of the real estate areas and the maximum percentage of the floor areas of all units that may be created therein, that are not restricted exclusively to residential use; (4) a brief narrative description of any development rights reserved by a declarant and of any conditions or limitations upon the exercise of development rights; (5) the maximum extent to which each unit’s allocated interest may be changed by the exercise of any development right described in subdivision (3) of this section; (6) the extent to which any buildings or other improvements that may be erected pursuant to any development right in any part of the common interest community will be compatible with existing buildings and improvements in the common interest community in terms of architectural style, quality of construction and size, or a statement that no assurances are made regarding compatibility; (7) description of all other improvements that may be made and limited common elements that may be created within any part of the common interest community pursuant to any development right reserved by the declarant, or a statement that no assurances are made in that regard; (8) limitations on the location of any building or other improvement that may be made within any part of the common interest community pursuant to any development right reserved by the declarant, or a statement that no assurances are made in that regard; (9) a statement that any limited common elements created pursuant to any development right reserved by the declarant will be of the same general types and sizes as the limited common elements within other parts of the common interest community, or a statement of the types and sizes planned, or a statement that no assurances are made in that regard; (10) a statement that the proportion of limited common elements to units created pursuant to any development right reserved by the declarant will be approximately equal to the proportion existing within other parts of the common interest community, or a statement of any other assurances in that regard, or a statement that no assurances are made in that regard; and (11) the extent to which any assurances made pursuant to this section apply or do not apply in the event that any development right is not exercised by the declarant. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-105 Time shares

4-105. Time shares If the declaration provides that ownership or occupancy of any unit is or may be in time shares, the public offering statement shall disclose in addition to the information required by section 4-103 of this title: (1) the number and identity of units in which time shares may be created; (2) the total number of time shares that may be created; (3) the minimum duration of any time share that may be created; and (4) the extent to which the creation of time shares may affect the enforceability of the association’s lien for assessments provided in section 3-116 of this title. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-106 Conversion buildings

4-106. Conversion buildings (a) The public offering statement of a common interest community containing any conversion building that may be occupied for residential use shall contain, in addition to the information required by section 4-103 of this title: (1) a statement by the declarant, based on a report by an independent architect or engineer, describing the present condition of all structural components and mechanical and electrical installations material to the use and enjoyment of the building; (2) a statement by the declarant of the expected useful life of each item reported in subdivision (1) of this section, or a statement that no representations are made in that regard; and (3) a list of any outstanding notices of uncured violation of the building code or other municipal regulations and the cost of curing those violations. (b) This section applies to any buildings containing units that may be occupied for residential use. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-107 Common interest community securities

4-107. Common interest community securities If an interest in a common interest community is currently registered with the Securities and Exchange Commission of the United States, a declarant satisfies all requirements relating to the preparation of a public offering statement under this title if the declarant delivers to the purchaser a copy of the public offering statement filed with the Securities and Exchange Commission. An interest in a common interest community is not a security under the provisions of 9 V.S.A. chapter 131. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-108 [Reserved.]

27A V.S.A. § 4-109 Resales of units

4-109. Resales of units (a) Except in the case of a sale where delivery of a public offering statement is required or is exempt under subsection 4-101(b) of this title, a unit owner shall furnish to a purchaser before the conveyance or transfer of the right of possession of a unit, whichever is earlier, a copy of the declaration, without any plats and plans, the bylaws, the rules or regulations of the association and a certificate that discloses the following: (1) The effect on the proposed disposition of any right of first refusal or other restraint on the free alienability of the unit held by the association. (2) The amount of the periodic common expense assessment and any unpaid common expense or special assessment currently due and payable from or by the seller. (3) Any other fees payable by the owner of the unit being sold. (4) The amount of any reserves for capital expenditures and of any portions of those reserves designated by the association for any specified projects. (5) The most recent regularly prepared balance sheet and income and expense statement, if any, of the association. (6) The current operating budget of the association. (7) Any unsatisfied judgments against the association and the status of any pending suits in which the association is a defendant. (8) The amount of any insurance coverage provided for the benefit of unit owners. (9) Any alterations or improvements to the unit, or to the limited common elements assigned to it that violate any provision of the declaration within the knowledge of the executive board. (10) Any violations of the health or building codes with respect to the unit, the limited common elements assigned to it, or any other portion of the common interest community within the knowledge of the executive board or managing entity. (11) The remaining term of any leasehold estate affecting the common interest community and the provisions governing any extension or renewal of it. (12) Any restrictions in the declaration affecting the amount that may be received by a unit owner upon sale, condemnation, casualty loss to the unit or the common interest community, or termination of the common interest community. (b) The association, within 10 days after a request by a unit owner, shall furnish to the unit owner a certificate containing the information necessary to enable the unit owner to comply with this section. A unit owner providing a certificate pursuant to subsection (a) of this section is not liable to the purchaser for any erroneous information provided by the association and included in the certificate. (c) A purchaser is not liable for any unpaid assessment or fee greater than the amount set forth in the certificate prepared by the association. A unit owner is not liable to a purchaser for the failure or delay of the association to provide the certificate in a timely manner, but the purchase contract is voidable by the purchaser until the certificate has been provided and for five days thereafter. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-110 Escrow of deposits

4-110. Escrow of deposits (a) Except as provided in subsection (b) of this section, any deposit made in connection with the purchase or reservation of a unit from a person required to deliver a public offering statement pursuant to subsection 4-102(c) of this title shall be placed in escrow and held either in this State or in the state where the unit is located in an account designated solely for that purpose by a licensed real estate broker, an attorney licensed in that state, or a banking institution the accounts of which are insured by an agency or instrumentality of the government until the deposit is: (1) delivered to the declarant at closing; (2) delivered to the declarant after the purchaser’s default under a contract to purchase; or (3) refunded to the purchaser. (b)(1) If the agreement for purchase or reservation of a unit provides that deposit funds may be used for construction costs, the declarant obtains and maintains a surety bond as required by this subsection, and the declarant provides the purchaser with a copy of the surety bond under which the purchaser’s deposit is protected, the declarant may withdraw escrow funds for purposes of construction. The funds shall only be used for actual building and construction costs of the project in which the unit is located. (2) The bond shall be issued by a surety authorized to do business in the State of Vermont in favor of the purchaser in an amount adequate to cover the amount of the deposit to be withdrawn. The declarant shall not withdraw more than the face amount of the bond. The bond shall be payable to the purchaser if the purchaser obtains a determination by the issuer of the surety bond that a claim is payable to the purchaser under the terms of the bond, which shall be consistent with the terms of the agreement for purchase or reservation, or a final judgment against the declarant requiring the declarant to return the deposit pursuant to the agreement for purchase or reservation. The bond may be either in the form of an individual bond for each deposit accepted by the declarant or in the form of a blanket bond assuring the return of all deposits received by the declarant. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2023, No. 96 (Adj. Sess.), § 1, eff. Apr. 29, 2024.

27A V.S.A. § 4-111 Release of liens

4-111. Release of liens (a) In the case of a sale of a unit where delivery of a public offering statement is required pursuant to subsection 4-102(c) of this title, before conveying a unit, a seller shall: (1) record or furnish to the purchaser releases of all liens, except liens on real estate that a declarant has the right to withdraw from the common interest community, that the purchaser does not expressly agree to take subject to or assume and that encumber: (A) in a condominium, that unit and its common element interest; and (B) in a planned community, that unit and any limited common elements assigned to it; or (2) provide a surety bond or substitute collateral for or insurance against the lien. (b) Before conveying real estate to the association, the declarant shall have that real estate released from: (1) all liens the foreclosure of which would deprive unit owners of any right of access to or easement of support of their units; and (2) all other liens on that real estate unless the public offering statement describes certain real estate that may be conveyed subject to liens in specified amounts. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-112 [Reserved.]

27A V.S.A. § 4-113 Express warranties of quality

4-113. Express warranties of quality (a) Express warranties made by a declarant to a purchaser of a unit are created as follows: (1) Any affirmation of fact or promise that relates to the unit, its use or rights appurtenant to it, area improvements to the common interest community that would directly benefit the unit, or the right to use or have the benefit of facilities not located in the common interest community warranties conformity of the unit and related rights and uses. (2) Any model or description of the physical characteristics of the common interest community, including plans and specifications of or for improvements, creates an express warranty that the common interest community will conform to the model or description, unless the model or description clearly discloses that it is only proposed or is subject to change. (3) Any description of the quantity or extent of the real estate comprising the common interest community, including plats or surveys warranties conformity of the common interest community to the description, subject to customary tolerances. (4) A provision that a purchaser may put a unit only to a specified use warranties the legality of the specified use. (b) Neither formal words, such as “warranty” or “guarantee,” nor a specific intention to make a warranty is necessary to create an express warranty of quality, but a statement purporting to be merely an opinion or commendation of the real estate or its value does not create a warranty. (c) A conveyance of a unit transfers to the purchaser all express warranties of quality made by the declarant. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 45, eff. Jan. 1, 2012.

27A V.S.A. § 4-114 Implied warranties of quality

4-114. Implied warranties of quality (a) A declarant and any dealer warrant that a unit will be in at least as good condition at the time of the conveyance or delivery of possession, whichever is earlier, as it was at the time of contracting, reasonable wear and tear excepted. (b) A declarant and any dealer impliedly warrant that a unit and the common elements in the common interest community are suitable for the ordinary uses of real estate of its type and that any improvements made or contracted for by him or her, or made by any person before the creation of the common interest community, will be: (1) free from defective materials; and (2) constructed in accordance with applicable law, according to sound engineering and construction standards, and in a workerlike manner. (c) In addition, a declarant and any dealer warrant to a purchaser of a unit that may be used for residential use that an existing use, continuation of which is contemplated by the parties, does not violate applicable law at the time of conveyance or delivery of possession, whichever is earlier. (d) Warranties imposed by this section may be excluded or modified as specified in section 4-113 of this title. (e) For purposes of this section, improvements made or contracted for by an affiliate of a declarant are made or contracted for by the declarant. (f) A conveyance of a unit transfers to the purchaser all the declarant’s implied warranties of quality. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-115 Exclusion or modification of implied warranties of quality

4-115. Exclusion or modification of implied warranties of quality (a) Except as limited by subsection (b) of this section, with respect to a purchaser of a unit that may be used for residential use, implied warranties of quality: (1) may be excluded or modified by agreement of the parties; and (2) are excluded by express disclaimer, such as “as is,” “with all faults,” or other language that implies the exclusion of warranties. (b) With respect to a purchaser of a unit that may be occupied for residential use, no general disclaimer of implied warranties of quality is effective, but a declarant and any dealer may disclaim liability in an instrument signed by the purchaser for a specified defect or specified failure to comply with applicable law if the defect or failure was a part of the basis of the bargain. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-116 Statute of limitations for warranties

4-116. Statute of limitations for warranties (a) Unless a period of limitation is tolled under section 3-111 of this title or affected by subsection (d) of this section, a judicial proceeding for breach of any obligation arising under section 4-113 or 4-114 of this title shall be commenced within six years after the cause of action accrues, but the parties may agree to reduce the period of limitation to not less than two years. An agreement to reduce the six-year period shall be evidenced by a separate instrument executed by the purchaser. (b) Subject to subsection (c) of this section, a cause of action for breach of warranty of quality, regardless of the purchaser’s lack of knowledge of the breach, accrues: (1) as to a unit, at the time the purchaser to whom the warranty is first made enters into possession if a possessory interest was conveyed or at the time of acceptance of the instrument of conveyance if a nonpossessory interest was conveyed; and (2) as to each common element, at the time the common element is completed or, if later, as to: (A) a common element that may be added to the common interest community or portion of it, at the time the first unit is conveyed to a bona fide purchaser; or (B) a common element within any other portion of the common interest community, at the time the first unit is conveyed to a bona fide purchaser. (c) If a warranty of quality explicitly extends to future performance or duration of any improvement or component of the common interest community, the cause of action accrues at the time the breach is discovered or at the end of the period for which the warranty explicitly extends, whichever is earlier. (d) During the period of declarant control, the association may authorize an independent committee of the executive board to evaluate and enforce by any lawful means warranty claims involving the common elements, and to compromise those claims. Only members of the executive board elected by unit owners other than the declarant and other persons appointed by those independent members may serve on the committee, and the committee’s decision must be free of any control by the declarant or any member of the executive board or officer appointed by the declarant. All costs reasonably incurred by the committee, including attorney’s fees, are common expenses, and must be added to the budget annually adopted by the association under section 3-115 of this title. If the committee is so created, the period of limitation for a warranty claim considered by the committee begins to run from the date of the first meeting of the committee. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 46, eff. Jan. 1, 2012.

27A V.S.A. § 4-117 Effect of violations on rights of action

4-117. Effect of violations on rights of action (a) A declarant, association, unit owner, or any other person subject to this title may bring an action to enforce a right granted or obligation imposed by this title, the declaration, or the bylaws. The court may award reasonable attorney fees and costs. (b) Parties to a dispute arising under this title, the declaration, or the bylaws may agree to resolve the dispute by any form of binding or nonbinding alternative dispute resolution, but: (1) a declarant may agree with the association to do so only after the period of declarant control has expired unless the agreement is made with an independent committee of the executive board elected pursuant to subsection 4-116(d) of this title; and (2) an agreement to submit to any form of binding alternative dispute resolution must be in a record authenticated by the parties. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999; amended 2009, No. 155 (Adj. Sess.), § 47, eff. Jan. 1, 2012.

27A V.S.A. § 4-118 Labeling of promotional material

4-118. Labeling of promotional material No promotional material may be displayed or delivered to prospective purchasers that describes an improvement that is not in existence unless the description of the improvement in the promotional material is conspicuously labeled or identified either as “must be built” or as “need not be built.” Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-119 Declarant’s obligation to complete and restore

4-119. Declarant’s obligation to complete and restore (a) Unless an improvement is labeled “need not be built,” the declarant shall complete all improvements depicted on any site plan or other graphic representation if the site plan or other graphic representation is contained in the public offering statement or in any promotional material distributed by or for the declarant. (b) The declarant is subject to liability for the prompt repair and restoration, to a condition compatible with the remainder of the common interest community, of any portion of the common interest community affected by the exercise of rights reserved pursuant to or created by section 2-110, 2-111, 2-112, 2-113, 2-115, or 2-116 of this title. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

27A V.S.A. § 4-120 Substantial completion of units

4-120. Substantial completion of units If delivery of a public offering statement is required for the sale of a unit, a contract of sale may be executed, but interest in that unit shall be conveyed only after the declaration is recorded and the unit is substantially completed, as evidenced by a recorded certificate of substantial completion executed by an independent architect, professional surveyor, or engineer, or by issuance of a certificate of occupancy. Added 1997, No. 104 (Adj. Sess.), § 3, eff. Jan. 1, 1999.

Source: Vermont General Assembly (legislature.vermont.gov)URL: https://legislature.vermont.gov/statutes/chapter/27A/004Fetched: 10/21/2026