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Message
Advice needed (lawyer) about weird real estate deal
Posted on 3/5/17 at 2:39 pm
Posted on 3/5/17 at 2:39 pm
I have a signed contract on a rental house. We are scheduled to close Tuesday but that will probably be delayed due to the owners son being killed in an accident today.
Here is where it gets weird (stupid) on my end.
Since the house was empty, last week he has allowed me (in writing) to start on the repairs and upgrades before closing so I can get a renter in there ASAP.
I've spent about 1k so far but will be putting in a new fence next week (4k).
I don't anticipate this death in the family to change anything, but it got me thinking. What response do I have if he backs out of the contract?
Should I stop all work immediately?
Here is where it gets weird (stupid) on my end.
Since the house was empty, last week he has allowed me (in writing) to start on the repairs and upgrades before closing so I can get a renter in there ASAP.
I've spent about 1k so far but will be putting in a new fence next week (4k).
I don't anticipate this death in the family to change anything, but it got me thinking. What response do I have if he backs out of the contract?
Should I stop all work immediately?
This post was edited on 3/5/17 at 2:41 pm
10
Posted on 3/5/17 at 2:48 pm to I Love Bama
quote:
Should I stop all work immediately?
Uh ya.
Posted on 3/5/17 at 3:14 pm to Teddy Ruxpin
I wouldn't put any more money into it till closing.
Sorry for the seller's loss.
Sorry for the seller's loss.
Posted on 3/5/17 at 4:43 pm to I Love Bama
You have it in writing, what more could you want assuming the death is legit.
Posted on 3/5/17 at 5:05 pm to I Love Bama
For sake of your own sanity and protection, I would stop work immediately.
Beyond that, this comes down to, how much of a hard-butt do you want to be to enforce the contract?
You could hold them to Tuesday closing.
If they decide to pull out of the deal, you could hold them to the deal or sue for damages, etc.
Sorry to the seller for their loss. Damn.
Beyond that, this comes down to, how much of a hard-butt do you want to be to enforce the contract?
You could hold them to Tuesday closing.
If they decide to pull out of the deal, you could hold them to the deal or sue for damages, etc.
Sorry to the seller for their loss. Damn.
Posted on 3/5/17 at 6:22 pm to I Love Bama
You may encounter a delay, but I'm just starting in the real estate game and think the only way such an event can void a contract is if the principal person in the contract was affected themselves.
Posted on 3/5/17 at 6:33 pm to I Love Bama
What does the contract say on his end about backing out? Is there a force majuere clause? I'd imagine this situation could be seen to quality as such.
Posted on 3/5/17 at 7:25 pm to I Love Bama
quote:
Should I stop all work immediately?
I would have never started.
If the deal falls through for some reason (seller gets better offer, is struck by lightning, title issue pops up, etc.), it's not likely he will say, "Sorry about that. Here is a check for the $5,000 you put into it." At best, you have a $5K lawsuit on your hands.
Posted on 3/5/17 at 8:30 pm to Twenty 49
Allow the seller a little extra time to close if needed. If the seller try's to back out you can mechanic lien the property as leverage for the amount of work you have done.
Posted on 3/6/17 at 7:32 am to I Love Bama
Man you should know better.
Posted on 3/6/17 at 7:43 am to I Love Bama
Of course you stop spending....
Posted on 3/6/17 at 8:16 am to I Love Bama
Unless you have it written into the offer, you could lose it all if you don't close and I don't think you'll have a case. Do you have a side contract signed by both of you on the work you are doing?
So yeah, I think you are taking a pretty large risk.
If that was more feasible to do regularly, many of these foreclosures and houses that don't qualify for financing would have investors doing $5-10k of work on issues that prevent it from qualifying for insurance pre-closing and then get a loan to pay the house off at the time of closing.
So yeah, I think you are taking a pretty large risk.
If that was more feasible to do regularly, many of these foreclosures and houses that don't qualify for financing would have investors doing $5-10k of work on issues that prevent it from qualifying for insurance pre-closing and then get a loan to pay the house off at the time of closing.
Posted on 3/6/17 at 9:24 am to I Love Bama
There is a legal doctrine under contracts called unjust enrichment, which could be used, although based on your facts you may not need to go that route. While the additional contract should not be considered part of the real estate transaction (fully incorporated) it should be viewed as a separate contract if written appropriately. If so, you could have recourse for work preformed, however you cannot force the owner to adhere to the original real estate contract since it hasn't closed. You should be okay to keep working, but understand if he backs out you will have to sue to get reimbursement for the improvements you made.
Posted on 3/6/17 at 11:03 am to chongo
quote:
There is a legal doctrine under contracts called unjust enrichment, which could be used, although based on your facts you may not need to go that route. While the additional contract should not be considered part of the real estate transaction (fully incorporated) it should be viewed as a separate contract if written appropriately. If so, you could have recourse for work preformed, however you cannot force the owner to adhere to the original real estate contract since it hasn't closed. You should be okay to keep working, but understand if he backs out you will have to sue to get reimbursement for the improvements you made.
This.
A person isn't allowed to mislead you into spending money to improve his property. The question would be whether it is worth it to spend the time, money and effort to pursue legal remedies.
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