| Copyright 2005-2007 All Rights Reserved Charles E. Marunde & FreeRealEstateLaw.com |
| Common Legal Issues |
What are the common or typical issues that cause so many disputes and so much
expensive litigation today? Here is a partial list.
- Both husband and wife have not signed the Purchase & Sale Agreement with
the latest accepted counteroffer, including initialled pages and including all
addendums that have not been superceded or voided by subsequent
addendums. - The legal description is insufficient by legal standards as established by many
Washington cases. The street address is insufficient. The tax parcel alone is
insufficient. The legal shown on the tax assessor's web site or summary sheet
is insufficient most of the time, because it is only a partial or abbreviated legal. - The legal description may be missing altogether, because it states in the body
of the Purchase & Sale Agreement, "Legal to be attached," or "Legal
Description Attached as Exhibit A," or similar language, and the attachment or
exhibit is not attached. This actually makes the entire contract void. In other
words, you have no contract. - In the next scenario, one of the parties (almost always the Buyer) argues that
the legal description was never attached and so the contract is void, but in fact
the legal was attached and was legally sufficient. The Buyer is lying to get out
of the contract. This is too common, and is most likely the result of the Buyer
hiring an attorney who suggested they lie. Yes, it happens. Welcome to the
real world. - The Buyer claims the Seller's Disclosure Statement was never provided to the
Buyer, and therefore the Buyer is not legally obligated to close the
transaction. This would be true if the Seller did not provide the statement. But
in the real world, even if the Buyer claims this and it is not true, the Seller
probably cannot force the Buyer to close with specific performance without
very clear documentary evidence. In one case, the Seller faxed the Seller's
Disclosure Statement to the Buyer, but never received the Buyer's signature
on the "Acknowledgement" signature line. The state statute does not require
the Buyer acknowledge, but if the Buyer has not, how would a Seller prove he
got it? Ah, you say, "How about the fax confirmation sheet showing the Seller's
Disclosure Statement was faxed?" First, no one seems to think of keeping a
fax confirmation sheet until after this kind of disaster, and second, it still is not
a fool proof way to get a judge to enforce the agreement. Judge's tend to play
politically correct these days, among numerous other problems in our justice
system. - Ambiguous language in a term or terms of the agreement, usually found in
non-lawyer language in addendum(s), which are wide open for litigation. This
is a huge problem area and covers a host of issues that parties attempt to
address with brief language, including some unique aspect with such issues as
foundations, mechanical, electrical, water, septic, drainage, pest infestations,
roofing, fixtures, appliances, county or city approvals, and conditions related to
other dependant real estate transactions. The problem language usually is
related to the scope of the work or the timing of the work. - The designated closing date is exceeded, and one of the parties is now
denying any obligation to close. The law allows the closing date to be
extended under a number of cases, so a party does not necessarily have the
right to NOT close. Closing dates can often be exceeded by circumstances
beyond the control of the parties. - Often a term of a contract has not been met by the drop dead date or by
closing, but not by any fault of either of the parties, but by the fault of a
bureaucracy, such as a city or county planning or building department. The
big question at such a time is whether the contract language sufficiently
addresses the problem and anticipates such possible outcomes. - Buyers may claim that their loan has not been approved, and because that is
a contingency, they are not obligated to close. That would be true if the loan
was turned down, and it is a clear contingency in the contract. - In the next scenario, the Buyers claim that their loan has not been approved,
and because that is a contingency, they are not obligated to close. The
difference in this case is that the Buyers intentionally did not provide
something the bank needed to approve the loan, such as relevant information
or third-party assistance. A Seller may say, "They can't do that. I'll take them
to court." Right. Good luck. - Buyers do not want to close (hidden agenda), so they concoct several
problems, including an argument that the Seller made certain
misrepresentations. For the Buyers' purpose, it may not make any difference
what the alleged misrepresentations are, because as far as the black hole
known as the justice system is concerned, once the power of gravitational
force begins to suck you into darkness, your in big trouble. In our system, the
Buyer has many advantages (beyond the scope of this discussion), and the
Sellers end up settling the case by compromising or walking away, losing their
buyers and incurring their attorney's fees. - Sellers do not want to close, because the price of property has substantially
increased, and they want more money (their hidden agenda), so they concoct
their own justifications for not closing. For example, their Agent breached his
fiduciary duties. Even if there is no basis for such a claim, it effectively kills the
transaction in the real world. - This list goes on and on, because as they say, "Truth is stranger than fiction."
We stop here only because we must stop somewhere, not because we are out
of scenarios.
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| Many couples who end up in litigation say, "We never thought this would happen to us." Isn't it interesting that we always think a nightmare is something that happens to someone else? |