Can The Seller Back Out?
I just had a seller back out of a contract I feel was ratified. Here is the situation.
I put an offer in on the house for asking price the day the house was listed. They countered with some minor changes which I then accepted. At this point both of our signatures were on the original contract. I then proposed an addendum to the contract stating that the house (since it is in a historical district), does not violate any of the current regulatios for the district.
Upon recieving my proposed addendum, the sellers then accepted another offer on the property, claiming that the original contract was never ratified.
Do I a) have any legal recourse on this matter. and b) Do I have any recourse against the listing agent.
I feel that this was at the very minimum an ethics violation and quite possibly a violation of real estate law. Let me know what you think. Any advice is appreciated.
FYI, l live in the state of Virginia.
The purpose of the addendum was to protect myself from the historical society coming back and saying "we dont like your new windows, or your vinyl siding, you need to replace it with what we want"
The exact words of the addendum are "That all alterations, additions and repairs to the property located at XXX have met with the standards, and/or been approved by the XXX historical society"
Had I seen this coming, I never would have proposed the ammendment. It wasnt a big deal, i was just trying to cover my butt in the future.
I did contact an RE attorney, but he just does closings and not litigations. I will contact another atty tomorrow. I thought about having a letter sent, but the issue with that, is even if they decide to sell to me, the other buyers can bring them to court. So they are between a rock and a hard place.
I guess the issue is whether or not we ever had a binding contract.
I am not an attorney, but I think once you added an addendum to the contract , then you can not claim you have a ratified contract, because the addendum serves as a contigency and I guess he went a buyer that did not have any contigency clause, I will contact an attorney.
This was a standard REIN contract. and the addendum does say "this document forms an integral part of the purchase agreement dated the X of XX"
And yeah, i hate to get a lawyer as well. I wouldnt mind if i knew i would win...but im not so sure. It seems pretty grey to me
pagnotar,
The Historical Society is not party to your contract. How does this protect you? Are you asking the seller to make a declaration that all work done prior to sale met standards or had the blessing of the Historical Society?
It seems as though this is straight forward RE law or contract law and is likely black and white to an RE attorney. My gut tells me that you signing the addendum and the seller did not just means that you both did not agree to the addendum and, therefore, it is not part of your purchase contract.
You should be able to call an attorney and tell him/her your story and ask what your position is. If he/she asks you to come in for an appointment and bring your wallet, you can either spend an hour or tell the attorney that you are interviewing at this point and are not looking to spend money with everyone you interview. Then call another attorney.
I do this quite often just to see whether my position is clearly black and white or if it is a gray area. If it is gray then I know I will be paying for research and if I decide to go forward, I work on a plan to control costs. Right now you want to find out if this is black and white. I think it is. In any event, you should be able to find out at a minimum (or no) cost.
Keep us informed.
Regards,
Ed
Yes, that is exactly what I was doing. I wanted the seller to make a declaration that all work done met the standards of the society. I dont blame them for not signing it, but I wanted to try.
Your gut feeling is the same gut feeling I have, and I need to contact another lawyer (will do so today). The one I spoke with yesterday, who was to do my settlement, has never seen this situation before, and felt it was gray. He did not seem like he fully understood the situation, nor did I feel comfortable with him. I will call around.
If in fact this is gray, what do you mean by working on a plan to control costs? And, I know you cant be specific, but ballpark, how much do you think it would cost me to research this and/or fight it?
Thanks guys, i will keep you informed.
I think maybe the issue is that the contract that my realtor ratified was the acceptance of their terms and the addendum. would this change the situation at all?
The addendum and the PA were signed by me at approximatly the same time, and delivered to the seller at the same time.
This is your standard MLS purchase. with agents and brokers on both sides. both brokers appear to be okay with this transaction being perfectly legal and i have no recourse according to both brokers.
This is also not an investment rehab, per say. It was intended to be a primary residence. It needs some work, but is in relatively good shape.
I am filing an ethics complaint against the agent involved. Any input as to what exact violation occured would be appreciated.
I am going to call some lawyers this afternoon and get some more opinions.
Thanks again, any further input would be appreciated.
pagnotar,
Glad to meet you.
I would give these folks a chance to assist you and let them tell you what they think.
http://www.state.va.us/dpor/reb_main.htm
At the lower left hand corner of the page it says "File A Complaint" do so and they will give you and answer.
John $Cash$ Locke
[addsig]
Thank you for your research.
I think the issue that could swing this the wrong way, is that the addendum and the contract were submitted at the same time. It could be argued that my addendum was considered a counter proposal. It seems like, what came first, the contract being signed or the addendum.
My contract is on the standard REIN form, using a real estate agent. I bought the property from a MLS listing, and the sellers have their own agent. I have no idea if the 2nd buyers have their own agent or not. I was told this was proprietary information.
In my transaction, both my real estate agents broker, and the listing agents broker feel that the seller was within their rights to back out of the contract and sell the house to a differnet seller. Thus my real estate agent is not fighting hard on this issue.
>What role do RE agents have in ratifying a contract between buyer and seller?
I am not sure how virginia law rests with this. But I do think this is a very important issue.
Per the contract "For purposes of this agreement, ratification shall mean the date of communication of final written acceptance of all terms of this agreement, not the date of removal or expiration of any contingencies"
I think the issue may be that when my realtor told the listing agent I accepted the changes, she also told them about the addendum, which may not be considered the FINAL written acceptance, and thus not ratified.
I have calls in to about a half dozen real estate attys in the area. They should be calling me back tomorrow or monday.
You are correct, I do have a contract with my signature as well as the signatures of the sellers. The only thing not signed is the addendum.
Like I said, i think the big issue here is whether my addendum was meant as an addendum to the existing contract, or if it was meant as a counter proposal to the original contract.
Interesting point about the addendum being a disclosure and not altering the contract. I have to admit I am not very familiar with the sellers discosure agreement in VA. It may very well cover this kind of thing (which will make me kick myself more!), but its something I will look into for future reference.
I hope my case is as solid as you feel it is. I felt the same way, but after talking to my wavering settlement atty, and both brokers telling me this is okay, I am skeptical. But I will get some more opinions. I worry that I am fishing for someone to tell me what I want to hear instead of what I should hear.
I am not a Lawyer, but here is my opinion.
Many times the sales contract states that addendums are part of the contract.
As the addendum that you submitted at the same time as the contract, is part of the contract, then you do not have a completed agreement.
You made a change in the contract; a change that could cost the seller money. The seller does not have to accept that change. This issue was obviously a significant issue, otherwise you would not have written up the addendum.
The seller probably decided to take a clean hassle free offer, instead of one that had him certifying historical compliance, which he might have no knowledge of, but which could cost him a large amount of money. The devil is in the details.
A considerate seller would have told you that the addendum was unacceptable, before accepting the next offer.
rewardrisk,
Let me state why I disagree with your assessment. You are right that addenda attach to the purchase agreement. This only is so when both parties agree to the addenda. If they do not, it does not void the purchase agreement. Do you think that if you went to a builder to buy a house and have a signed purchase agreement (both parties) and you wrote an addendum that the kitchen walls are to be yellow instead of white and for the same price; he refuses to sign because he buys white paint in thousand gallon containers that he can sell to someone else? I do not think so. This is a proposed addendum and not a change to the contract. pagnotar cannot change the contract by himself-- he proposed an addendum that was rejected, therefore, there is no attachment.
pagnotar,
The fact that your document has Amendment/Addendum to Purchase Agreement implies recognition that a Purchase Agreement is in effect. My belief in your position is even stronger
cjgaines,
Glad to meet you.
You will probably need to bring a Quiet Title action to clean up the title.
"An Action to Quiet Title by the court that establishes ownership of property."
John $Cash$ Locke
[addsig]