Months of work a thousands of dollars down the drain

5 Replies

In December 2014 I signed a contract to purchase real estate from 2 people with a closing date of 21 December.

Just before signing the closing statement, one of the sellers was hit by a car and ended up in hospital. 

Then the attorney handling the closing went on Christmas vacation. Upon return I told her we urgently needed to close the sale. I had already paid for materials and labor to start the renovations, anticipating this would be happening end of December.

The attorney was so slow to do everything and said we needed to clear title before closing. She was referring to a building violation on the property. I told her I would be buying the building as is and taking responsibility of the violation. I asked her several times to urgently arrange the signing of the closing statement with the sellers. She told me she couldn't as she didn't have their phone number. I was getting very frustrated and anxious by this stage as I knew I was getting a very sweet deal and was worried the sellers could back out.

Then an attorney on the  sellers end popped up, who was representing him in in the car accident incident.

Today I received an email from the sellers attorney that they are cancelling the contract, citing that its null and void as its past the closing date. I believe that legally they are correct and within their rights and there is nothing I can do.

Its a major financial loss, not to mention months of work. Nothing I can do, right?

That is very unfortunate. Sorry that happened to you.

However:

"I had already paid for materials and labor to start the renovations, anticipating this would be happening end of December."

Pre paying for a property you do not own seems very questionable. 

You should ask a real estate attorney to review the contract and if you can sue for specific performance. Weigh the costs of doing so versus just returning the materials (or selling them to surplus stores or something) and make a decision from there.

"She told me she couldn't as she didn't have their phone number."

That made me laugh out loud pretty hard. You should probably get a new real estate attorney. You didn't have them perform a title search before closing?

"Just before signing the closing statement, one of the sellers was hit by a car and ended up in hospital."

Do you have actual proof of this??

Sounds like you just got played.

Does the contract have anything about a "good faith dealings" clause??

At this point you need to quit doing things yourself as the hole is being dug bigger and bigger.

Take all documents to an attorney. Even better is to call and send ahead of your appointment in .pdf format to them. This way when you get there to the appointment there will be talking points and a flow to the meeting. The attorney will have already reviewed and then can discuss more in detail.

Might spend a few hundred or the attorney might take pity on you and not charge as a good faith thing.

No legal advice.     

@Nat Chan

Clearly, not a good situation...but here's my thoughts based solely on your comments.

1.  If you chose the attorney, it's time find one with a jurisprudence degree because the one involved in this transaction appears to have received a degree online through a nonexistent law school in Nigeria.

2.  If the seller is allowed by contract to terminate without default on the part of a buyer (and I understand this "may" not be the case), I would seriously consider using another contract form that has more teeth.  

3.  Never...that's right, NEVER buy materials for a property you don't own.  I think you now understand why. 

4.  As a buyer, did you receive a title commitment that showed the exceptions to coverage as well as liens that needed to be resolved prior to closing?  If not, that's an issue that should be addressed contractually in the future.  If you did receive it, then you should have recognized and addressed the matters long before now.

  

@Nat Chan   

Today I received an email from the sellers attorney that they are cancelling the contract, citing that its null and void as its past the closing date. I believe that legally they are correct and within their rights and there is nothing I can do.

I am not an attorney, the following is not legal advice and should not be construed as such despite how I may chose to phrase my response. 

They have NO legal right to cancel the contract. THE SELLER is in default! They did not close on time. You have been ready willing and able to close. I repeat the SELLER is in default.  I would say to their attorney "either you are bluffing or you are the stupidest attorney I have ever met."  

If you are going to continue doing this business you are going to need an attorney for these kinds of issues. Now would be a great time to find one.

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