Can Seller Sue Buyer
I have a contract on a rental house that, only after the contract was signed, was revealed to me to be on Industrial Zoned land. I have had a tough time finding a lender who will underwrite a loan, and am concerned that I won't be able to sell it when I need to (i.e. no exit strategy).
I asked the seller to cancel the contract and was told that I couldn't because we none of the terms of the contract were violated.
So, is failure to identify the very unusual nature of the house (on I zone) a material breach of something that I can throw back on the seller?
Can they sue me if I say I'm not going forward? What would they sue me for? Specific Performance? What damages could I face? Can I defend myself?
Thanks in advance for helping a floundering newbie.
There should be alot of outs here...appraisal...if it isn't worth what your paying, the appraisal will come in low and you therefore can't get the financing you want....inspection...find anything that is wrong with it and have them fix it...Financing....what kind of interest rate did you say you had to be able to get? If you can't get it anymore...then you can get out....
I don't see why it being on industrial zoned land is a problem? Are there adjacent properties that are industrial development? If its in a residential neighborhood, there really shouldn't be a problem.
Anybody can be sued. The real question is who will prevail.
You need to check the contract you signed, particularly the contingency and default provisions. Also, your state might require the seller to disclose certain things about the property. For instance, in PA, the law requires that the purchase contract state what the zoning is if it is not zoned for single family residential.
While I'm generally a firm believer in doing whatever I promise to do, as Nancy says, you may well have a legitimate out because you're just now finding what the property really is.
I will tell you that VERY rarely is a defaulting no-go buyer sued to MAKE him buy the RE...oh he could, but his legal costs are probably too high to allow him to do this casually, and his knowing you're going to claim an out is going to slow him down further.
He'd have to pay his own attorneys' fees and only by winning a suit against you could he even start to reimburse his legal fees and court costs.
So, if you're going to walk, do it now and you can probably do so without legal consequence.
John Merchant is right...My attorney said she never had it happen where it actually went to court because the seller would lose. They may blow some smoke but walk from it now if you aren't happy.