Seller dies, and Daughter Refusing to Honor Contract

35 Replies

Situation: in 2017 I got a property under contract for $60k. Found a buyer, who paid $1000 earnest money to the owner. Owner was elderly, and his wife had passed away in 2010 without leaving a will. So estate had to go through probate. I got an attorney who did a lot of work(for more than a year) to get it through probate.

Around the end of 2018, this elderly owner got Alzheimer's and died. Now his daughter is refusing to honor the agreement. She is claiming that he had dementia at time of signing the agreement, which is not true.

She is demanding that I remove lien on the property.

What would you do in this situation? Thanks in advance. 

I am certainly not an attorney but it sounds like you need to get one involved if you want to complete the deal for this property. Just so that I fully understand your circumstance, you have had a property under contract for sale, with $1,000 earnest money, since 2017, correct? Also sounds like you have a lien on the property for the $1,000 is that correct?

What is it that the daughter wants and who's the current legal owner of the property now, is it her? Also, what's in the contract for cancellation or termination?  Typically there would be an out clause for either party but what are the conditions?

Bottom line is that if you want the property then you'll have to fight so get your attorney; if it's not worth it then you and the buyer need to cut your losses and move on. Hopefully if and when the current owner does sell, you'll get your money back.

You're going to want to get an attorney for sure. Some may jump in and tell you to sue for specific performance, but I've heard terrible things about that process. Your best option may be to ask for your costs to be reimbursed, in lieu of suing for specific performance.

Bridgette Delva... thanks for the prompt response. Because it was a probate situation, we wrote contract end date as "end of probate process." And afterwards I filed a Memorandum of Agreement with the county recorder's office. That's the "lien" that daughter is asking me to remove.

Now that the father has died, the daughter wants to renovate the house and keep it as rental.

What does the Contract provide for with respect to non performance by seller? Practically speaking courts will rarely grant specific performance (force a sale). You may have a case for some form of monetary damages if you can show concrete losses. This is going to be a state law matter so consulting with a local attorney is necessary.  Most buyers will just move on in these situations as the lawsuits are rarely worth the cost and outcome. 

Originally posted by @Wayne Brooks :

@H J. Did the purchase agreement specifically state it was binding upon the seller’s heirs?   If not, the contract died with the seller, under most state laws. 

 Are you sure?  I've found the exact opposite to be true.  A real estate contract is an “executory contract” that remains legally valid until the closing is completed.  An heir or estate is still legally bound by the contract in the same way that a dead person's estate is also legally bound to a rental lease agreement until the term is satisfied.  Legally binding promises don't suddenly vanish if they can still be fulfilled.

@Michael Gilman Good questions. Contract says regarding seller default:

"If seller defaults, buyer may pursue all remedies allowed by

law and seller agrees to be responsible for all costs incurred by buyer as a result of sellers default."

This is in Georgia. You're right that most people will just move on. But buyers rightly feel they have legal right to buy this property. They spent money and time and we hired attorney to work for a year on it. But you're right that i should consult with local attorney, and see if we can get monetary damages. Thank you. 

I’d move on. Try to negotiate for some costs.

I can almost guarantee it will be a waste of your time to go in front of a judge. Judge’s will be extremely lenient to a sympathetic case like this. I’d bet the daughter will have a doctor say the owner had Alzheimer’s and they didn’t catch it until after he signed this contract. That is a perfectly plausible scenario. 

@H J.

What would I do? I would move on. Your likelihood of recovering damages is questionable, the amount of damages is probably not enough to offset your potential legal fees to collect it, the daughter may not have the money to pay them, and you would be suing someone who just lost their dad. Not a great situation. Chalk it up to a life lesson and move on.

@H J. I’ve been through a similar situation as the primary buyer though. You are in for a heckuva fight and a long one. Courts give great weight to the wishes of the deceased and any confusion over that takes time to sort. And in addition there will be a presumption about your intent as a wholesaler to assign the counteract...

It’s hard to see this being worth your time at the end of the day, not to mention you will likely have to close yourself. You may even win and get paid pennies or likely lose money.

Can u arrange a conversation where you explain the money you spent and need to be made whole? That might be best for all.

For what it will cost you, I'd tell her you will remove the lien, but she needs to pay the expenses you incurred and return your deposit.  Then give her a list of the lawyer's expenses and a copy of the agreement showing you paid the deposit.  

Getting an attorney is good advice, but also be aware that will cost more money. Do you want to sink more in, knowing odds are good you can't win this one? I would try to recover the $1000 and any hard fees I already paid. That is probably what you would get awarded in court. Smart move on your part placing the lien. It is your only leverage at this point. I would try to have a heart to heart with the daughter and explain, if it ends up in court it will cost you more, because I will request my attorneys fees. 

Have you reimbursed the buyer their $1000? If not you may want to consider doing that and cancelling their contract. You don't want a bad reputation because of this.

What was your fee on this? It's gotta be a big one to be worth the time. You'll probably be better off cutting your losses and putting the focus into getting another deal going. The seller can probably find all kinds of ways to drag it out and waste your money on attorney fees until you give up.