buyer refuses to remove contingencies or cancel

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Latest post 04-06-2006 1:24 PM by Fxston. 5 replies.
  • 04-06-2006 11:48 AM

    Sad [:(] buyer refuses to remove contingencies or cancel

    I listed my property for sale in Bay Area, CA in mid December 2005. The property has a litigation pending between the HOA and the builder which was disclosed on the listing, along with the mandatatory statutory disclosures. On 03/06/2006 I entered into a purchase agreement with a buyer. Buyer was to have removed loan contingency on 03/20, and inspection contingency on 3/23 along with approval of all disclosures. They failed to remove either and refused to do so without giving any reason. On 3/24 my realtor sent a letter asking for removal of contingencies, reminding that time was of the essence, and at least give us a reason why they wont act per the contract. On 3/27 I gave the buyer a 24hour notice to perform on acceptance of disclosures and removal of all contingencies. They verbally refused to sign even having received it, and refused to act on it. I gave a cancellation notice on 3/31 based on buyer having failed to act on notice to perform. Escrow was to have been closed on 4/4. On 4/4, we received a call from the buyers agent stating the cancellation meant nothing to them, that they still wanted to buy the house, and that they had signed all loan docs at title,and wanted to proceed with sale. They threatened me with litigation based on "specific performance" if I refused to sell. Now, it is 4/6, and the buyer still refuses to sign any contingency removal, refuses to approve any of the disclosures, refuses to cancel the agreement, and insists on me showing up at title to sign docs or they will sue me for "specific performance" and put les-pendens on my property. The original contract had an arbitration clause. My listing agreement with my realtor also expired on 3/15.

    Questions:
    - Can they just refuse to cancel even though they are in full breach?
    - Can they force me to sell, even though they won't act on any of their contraction obligation whether it be timelines or deliverables?
    - what is my recourse in enforcing the cancellation?
    - I have lost opportunity to sell to others in mean time, am still not able to sell or re-list due to them not honoring cancellation, nor am I able to rent, so what are my recourses?
    Your help is very much appreciated, as I at my wits end.

    Thanks,
  • 04-06-2006 12:36 PM In reply to

    re: buyer refuses to remove contingencies or cancel

    Your post doesn't bother to mention what your goal is here or why you refuse to proceed to closing-sale. Why do you want the sale canceled so badly?

    We can't possibly know what your contract says from here, so certain questions can't be answered. In the contracts I've seen, the contingencies tend to fall off and/or it makes no material difference if the buyer doesn't actually sign anything. They'd have until 3/20 to demonstrate that they couldn't get financing; they'd have until 3/23 to have an inspection or address inspection results.

    Your recourse is to talk with a local real estate attorney to review your documents and the situation in general. Your next step may then be to get a referral to the arbitration panel that you all supposedly chose per the contract.
  • 04-06-2006 12:59 PM In reply to

    News [|*|] re: buyer refuses to remove contingencies or cancel

    Due to the fact that the HOA has a litigation pending against the builder, I would like the buyer to acknowledge that I have disclosed it to them, and they know about it. They are refusing to sign the disclosures saying they have received, read, and approve them. If I proceed with the sale, will I not be in the bind in the future to claim that I never disclosed anything to them. They are refusing to sign everything I have given them, which the purchase contract (std. California Association of Realtors form) states is a pre-requisite to proceed on the sale.

    I just want them to approve my disclosures and proceed on the sale, or if they dont, then cancel.
  • 04-06-2006 1:24 PM In reply to

    re: buyer refuses to remove contingencies or cancel

    But you've already said you've terminated the contract. Presumably you're allowed to do this unilaterally and contract doesn't require mutual written acknowledgement.

    Again, you should be talking with a real estate attorney. If their agent can't impress upon them that the contract requires that they acknowledge certain disclosures (the HOA litigation), I don't know what to tell you. Normally, if they go through the closing process, they couldn't later come back and whine about, for instance, the HOA litigation. (This litigation would normally also show up on the title report.)

    You can also rescind your termination, show up at closing and, if they refuse to sign an acknowledgement of receipt of the information about the HOA litigation (and whatever else your contract requires them to acknowledge in writing before proceeding) -- then simply don't close. understand.

    If your contract requires mutual written acknowledgment of cancellation, that's also odd -- you'd have to ask your-the local real estate attorney what you're supposed to do about that.

    You need to talk with a local real estate attorney.
  • 04-07-2006 11:04 AM In reply to

    • Drew
      Consumer
    • Top 10 Contributor
    • Joined on 03-30-2000
    • PA
    • Posts 49,307

    re: buyer refuses to remove contingencies or cancel

    Laymans take:

    I suggest you are going about this backwards.

    The requirement to give notice doesn't mean the other person is required to acknowledge receipt, makes it easier, but you sort of only need to prove it was recieved. Lawyers know the drill. Even if the contract requires to other side to acknowledge receipt I suspect that is totally ineffective as to that side later raising the contents of the notice as an objection if you can show actual delivery.

    And under that fact pattern I don't know if you are on solid grounds to unilaterally terminated contract for buyers nonperformance since its unclear if buyer didn't perform.

    If the time for a contingency has come and gone, in general its self cancelling so if the buyer has say a 60 day finance contingency and he fails to meet the terms/dates he is merely waiving that clause, and if he cnnot come up with te rest of the money at closing then he loses his deposit or whatever hte contract says. I don't see how a buyer can evoke a contingency which has expired unless you are slack enough to extend it.

    To me a critical economic factor is has the buyer fully funded the escrow ? You watch the money tree.

    I think you want to be talking with counsel not the agent! Me. I'd be insisting on closing at th set date and making sure the escrow was fully funded--such that if buyer plays any games I walk with the full escrow.

    If the buyer wants an extension I'd insist on a written one with more NONrefundable deposit.
    If he needs more time for an inspection or loanwhatever I'd play serious hardball, no inspection extension no finance contingency, any buyer extension requires solid hard cash nonrefundable up front. You do NOT permit him to reive a contingency which he can then twist into an exit clause

    You use your lawyer to deliver such notices are your side may deem necessary at closing and lock it in. But you get control of the money tree and if the buyer balks you are in position to take all his money on deposit to date.

    You do not expect his agent to act as your legal spokesperson! Hire a hardbal player and get the closing done! Somehow this buyer is playing some cute games--so use a professional hardball player and get the sale done.



  • 04-07-2006 11:50 AM In reply to

    re: buyer refuses to remove contingencies or cancel

    Who are they refusing to? Their agent/broker? The title company? They claim they have signed the loan docs at the title company, have you asked the title company what they have signed?

    They called you to “threaten”. Their call is also meaningless. (The title company is just going to sit on the sidelines and wait.)
    Find out for sure what they signed at the title company, then have YOUR attorney advise whether and how to respond.
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