Legal Question
Just wanted to run this by all of you and see what your opinion is. In June I submitted a purchase agreement on a property, with an initial close date of July 1st. When the title company did the title work, they found a lis pendens for an encroachment and also a trespassing complaint stating that the driveway was trespassing on the neighbor’s property, filed April '04.
Prior to finding this information out, I obtained a renter beginning July 1st. Since we could not close with the lis pendens, I signed a "move-in agreement" with the previous owner to allow my renter access to the property ($25/day). The attorney's worked on removing the lis pendens until approximately September 1st, and we scheduled the close date to be September 15th. One week before closing I find out that the roof leaked (required to be on property disclosure statement, was not on there) so I immediately called the listing agent seeking remedy. Nothing was remedied prior to closing.
2 days prior to closing, I was informed that the seller was short $7,200 cash to close. Since I am a real estate agent, I was being paid commission on the deal. The other agent and I chose to split the shortage ($3,600 each) so that this gentleman could sell his house. So at this point I expected the $3,600 that I paid to erase the $1,200 that was owed to him under the move-in. Not the case.
I just received a letter from his attorney demanding full payment within 10 days, or they will file a lawsuit. I am in the process of obtaining a bid for the roof replacement, which initially looks to be a little over $7,000. My plan is to file a counter for the replacement of the roof, plus the $3,600 that was paid to the prior owner so he could close. Opinions?
You said: "I expected the $3,600 that I paid to erase the $1,200 that was owed to hime under the move-in." Did you include it in your contract, when you agreed to split the shortage? I know, it might not be fair, but if it is not in the contract, they could probably go after you. Also, I would recommend reviewing your paperwork with your Broker and an attorney.
It was not added to the contract and now I am kicking myself for it. I guess I figured he would see it as a kind gesture and let it go.