united-states real-estate
Does the meaning of &quot;preliminary&quot; rest on intent or outcome?
<p><a href="http://www.oregonlaws.org/ors/100.005" rel="nofollow">The Oregon Condo Act</a> defines "negotiation" as:</p>

<blockquote>
  <p>... any activity preliminary to the execution by either developer or purchaser of a unit sales agreement, including but not limited to advertising, solicitation and promotion of the sale of a unit</p>
</blockquote>

<p>Now imagine a scenario where a developer lists a condo for sale for $1M. The market value of it is really $500k, but he thinks he can get $1M. A bank gives him a loan for $900k with a lien against the property. He lists it for sale at $1M, then $915k, but it fails to sell due to a bad downturn. Then he rents it out, then he gets foreclosed on. He deeds it to the bank in lieu of foreclosure.</p>

<p><strong>Can anything he did be considered a step "preliminary to the execution ... of a unit sales agreement?"</strong></p>

<p>I would argue that since no one executed a unit sales agreement, then nothing this developer did could be proven to be <em>actually preliminary to a unit sales agreement.</em> When the developer rented it out, this was a step preliminary to foreclosure; he knew he was doomed and just tried to milk the property for whatever he could before he had to hand it over to the bank.</p>

<p>However, the defense will argue that his advertising the units for sale was, in fact, a "preliminary" step to the execution of a sales agreement, <em>purely because a sale was his reasonable ultimate goal</em> and such steps <em>normally are preliminary to sales.</em> </p>

<p>Who is right? Do particular facts and reality matter at all for what counts as "preliminary"? If not, why is this even part of the law? If facts don't matter then why do we have courts? I'm honestly curious why imagination and hope are enough to avoid violating this statute. </p>

<hr>

<p>Another example: if a preliminary hearing does not result in trial, can it rightly be considered to have been <em>non-preliminary in fact</em>?</p>

<p>It must rest on intent. If negotiations take place, for example, they must be in contemplation of a sale even if such sale never eventuates. </p>

<p>If it could be <strong>proven</strong> that one or both of the parties was never had a <em>bona fide</em> intent to sell/buy then it could be argued that the negotiation was not preliminary but not otherwise.</p>
