Updated almost 12 years ago on . Most recent reply
Hard Money Lender Goes Rogue?
I have a deal with a hard money lender. First time working with him. The terms are not important. The deal is funded. I am the buyer. Both he and I are ready to close. Title has been slowing down the transaction due to a large water bill credit on the property. Neither I or the Lender are the cause of the delay. We are both ready to close. Today, Lender calls me and demands that I pay him $750 for the delay. He relies on the following language, which he drafted, in an email between us:
“if you do confirm and then back out or the deal doesn't happen for some reason not due to my negligence -- I'd like to collect at least $350 for the attorney and $400 for me”
He argues that his money is tied up in a delayed transaction, which I understand. On the other hand, the delay is not my doing. I want to close just as much as he does. I took issue with my having to pay additional for something outside my control, particularly given that the deal would eventually close, and he would get the full value of the loan.
Eventually, I offered to pay $200 (approximately one months interest under terms of the loan) for the delay. He rejected this, effectively calling me a slimeball for refusing to pay him the $750 outright.
Am I out of line here? A delayed closing sucks, but to me, it falls into the "**** happens" category, and the deal was still in place. Moreover, I thought I was being pretty darn generous by offering to pay for a delay that wasn't contemplated by the lender's contract and that I didn't cause.
Thoughts very welcome.
