All Forum Posts by: Vincent Incopero

@Jia Lin, you are in a bad spot. The subs can still lien the property if they weren't paid by the GC, they have leap frog rights that allow them to jump over the GC and lien the property if they performed work/improved the property and were not paid. 

The same goes for material providers (roofing/electrical/plumbing supply companies, cabinet company). I have seen this happen too many times. A current client of mine EVEN had to pay a nursery/supply yard for sod that his landscaper bought on account, that was delivered to the property, after the landscaper never paid the nursery/supply yard. 

IDK if the fight is worth the effort based on how the law is written. When you pay the GC based on progress made or work performed, you need to collect lien waivers for materials used and for labor performed. IMHO, you should contact an attorney, presumably the one with whom you worked when you acquired the property, to see if he/she has any ideas up their sleeves.

@Vincent Botta, 

1. 1. Refer to any and all of the contingencies set forth in the Contract (ie. inspection, attorney review and financing).
2. 2. See which of these contingencies are still active and provide viable means to exit the contract as of 3.27.2020.
   1. For inspection, you might need a inspection report
   2. For financing, you might need a denial letter from a lender
   3. For attorney review, typically no explanation is needed other than mere recitation that "the disapproval of the Contract is not solely based on the purchase price."   
3. 3. Tell your attorney that you want to cancel. 
   1. COMMUNICATE THIS RIGHT NOW, TONIGHT, BEFORE YOU GO TO BED, AND WHEN YOU WAKE UP IN THE MIDDLE OF THE NIGHT. He or she should know which contingencies are active and how to get you out of the deal with the safe return of your EMD.

You have a contractual obligation, as opposed to a legal obligation, to tender the Earnest Money to the party listed as the Escrowee in the contract. 

If you do not feel comfortable sending the Sellers attorney a check, IMHO it is actually more work/headache/PITA to have the EMD accepted and held by a title company than an attorney and IMHO it is even more complicated to get the money back from a title company if and when you cancel.

A good recommendation is TO NEVER tender the EMD if you want out of the Contract. An even better recommendation is TO NEVER make an EMD check payable to a Seller as they can disappear with your money and they are not subject to any licensing or disciplinary actions or professional rules of conduct like Realtors or Attorneys.

FWIW, I am an Real Estate Attorney and I have completed thousands of real estate transactions in the 5 years that I have practiced Real Estate. I would give this exact advice to ANY of my clients.

@Samantha P., hate to make matters worse, but this is another problem:

"She has no security deposit left because she used it up on her rent before he sold the building to me."

I hope that if you hired an attorney to assist you with the purchase, that you received a security deposit credit at the time of purchase and if not, you received some kind of written indemnity for now missing/used security deposit from the Seller.

It's actually 3X of the deposit, plus attorneys fees

@Matt Westfallen speak to your accountant about the tax implications. No benefits that I am aware of other than limited liability, you will still be responsible for the satisfaction of the debt obligation (the Note). 

This is standard practice and is done often, hence the reason the lender has suggested that you QCD ownership to your LLC post closing.

Consider GC Realty- Mark Ainley

To whom were the EMD funds wired to? That is the person/place you should be speaking with.

@Steve LeBlanc, you are far too kind. Truth be told, I see myself as just another ordinary guy that happened to go to Law School for 3 of the best years of my life. 

The signature requirement would be set forth with specificity in the EMD agreement that you would have had to sign before title properly took your funds in on deposit.
 

@Steve LeBlanc, standard stuff here. 

Money is in escrow and as such, is not going anywhere. Disregard the RE Act as funds aren't being held by a RE brokerage, rather a title company. 

Either way, funds cant be released without the required signatures and I imagine that this is a SJO (Strict Joint Escrow) requiring signatures of the Seller and the Buyer in order to direct the funds to be moved. 

Have your attorney fire off a "keyboard warrior" email demand to prod the Seller into signing and to get everyone's attention. 

@John Hurlbut - Speak to your accountant RE state income tax, I am not a tax professional, but I believe that rental income is subject to local tax. There are no municipal fees, other than water and garbage, on a continuing and ongoing basis. 

DONT TAKE SECURITY DEPOSITS AND DISCLOSE BUILDING VIOLATIONS WITHIN THE LAST 12 MONTHS. 

HIRE A LOCAL, IL, REAL ESTATE ATTORNEY, to assist you through the process. It is and will be money well spent.