Tricky situation - To file suit over breach of contract?

4 Replies

Hey all,

I am hoping to gather some opinions over an odd situation I am in over a potential deal.


Firstly, this is a would-be fix and flip. The seller and I had initially agreed on a sale price and have a signed P&S between us.

Now, let me explain the issues and how the seller originally acquired the property. Back in December 2014, the seller acquired this property via a judgement lien - from the previous owner who was in foreclosure. 

The seller and I made it to a couple days before closing, before realizing the title was clouded - reason being - the previous owner (the guy who was foreclosed on) had filed a mortgage appeal - I guess to try and get the house back. This appeal was open for 20 days. So, closing was delayed.

As time passed the current seller was getting frustrated. Now, comes June 29th where the seller made a court date to motion giving the property back to the previous owner - essentially voiding the process he had just gone through months earlier to acquire the property in the first place.

He has said he will no longer sell to me - he'd rather go through the court to try and give the house back. Somehow, he makes off with more money this way, compared to if he sold to me. However, he had said that if the motion in court failed, then he would sell to me.

Yet, we are under contract. The seller and his attorney have not responded to my nor my attorney's contacts.

So, where I stand now is evaluating my options.

A) I can put a lien on the property over our contract. But, this is essentially a lawsuit. I would have to get a prejudgement remedy from the court. According to my attorney, this is costly and he isn't heavily recommending this ( I am getting other opinions - and hope to get some here too!).

B) Have a marshall file a summons to the seller regarding the breach of contract and recover my current expenses.

It is a great flip project and would be a shame to lose it, but it has come to a point where I need to either move on, or execute another move.

I am weighing out my options. I haven't had any similar experiences to this one.

All opinions appreciated!

If you have nothing $ in the deal. walk away. Life is to short for these kinds of problems.

A buyer's recourse if the seller cannot close is almost always limited to "liquidated damages".  That is, you get your earnest money back.   If your contract says "specific performance" you might have a basis for a case.

This stuff happens.  This is a numbers game.  Write this deal off and move onto the next.

It's unclear what the exact title issue/resolution is.  Bit, most contracts, and judges, allow the  seller an out if the seller can't provide clear title, with reasonable efforts. Trying to put a "lien" would be useless.

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