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Joe Burrage, Real Estate Pro in San Antonio, TX

What action should I take when a seller changes their mind about completing repairs?

Asked by Joe Burrage, San Antonio, TX Sat May 22, 2010

I am representing the buyer. Both parties agreed to terms and the contract was receipted by title. During the option period, the inspection was completed and a list of repairs was sent to the seller's agent with the inspection report. The seller's agent sent back a list signed by the sellers indicating which repairs the sellers would complete. My buyer agreed to the repair list and signed. I retyped the list word for word, eliminating the repairs that the seller would not complete, had my buyer sign, and I forwarded to the listing agent for signatures. I followed up with multiple calls to the agent to confirm receipt. The agent confirmed that the seller would sign the amendment and return to me in the morning. I already received a list signed by the sellers stating the repairs they were going to complete. The next day, the agent informed me that the sellers changed their mind about completing repairs. I believe the sellers are in breach if they do not complete the repairs. ???

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Ralph Buller’s answer
This is in response to Yionada Robinson: If both parties have signed the TREC #20-8, either party can force a sale. Read number 15. DEFAULT. This is called specific performance. So, Texas does have a legal provision which can make someone sell their house.
1 vote Thank Flag Link Mon May 24, 2010
Estoppel Estoppel Estoppel.

You have the seller’s signature on the original contract, this is all you need.
You procured a ready willing and able buyer, sellers agreed to made repairs and you have their signatures.
No need to look any further, if the sellers back out of performing said repairs you should immediately have your broker and theirs talk to see where mediation would take place.

If mediation does not help, then arbitration is the next step.

But please, the first step is to have your broker explain that you have the proof for a successful estoppel case, and if deemed necessary your buyers will litigate. This will at least ensure that a hearing by the seller's broker can take place.

On another note, the seller's agent probably does not want to get into a legal mess, I would level with this agent, and explain what "estoppel" is, and how, even if the seller looses in court, this agent could get sued for this losses by the seller on the basis that the seller was misrepresented. Simply put, the sellers could say that this agent did not advice them properly, and that he/she is under qualified in the Law of Contracts field, which happens to be one of the three pillars of our Real Estate education for certification.

I believe that seeking the advice of a Real Estate Lawyer is warranted, BUT I also believe our contracts have a mediation, and arbitration clause, which would stop a Real Estate lawyer from litigating until these two (less expensive) options have been exhausted.

So, it would not hurt to save your client this out of pocket expense for the time being until you have both brokers talk. Remember Joe, you have the upper hand; you have the almighty written proof!

Sincerely,

Ramon Viggiani –Realtor- http://www.BuyingAndSellingUSA.com
0 votes Thank Flag Link Sun May 23, 2010
Ralph, thanks again for your input. Hopefully, this transaction does not require litigation. My buyer is ready, willing and able to perform, provided that the seller performs under the agreement. I look forward to a swift resolution. However, my client and I are prepared to take whatever action neccessary to ensure that the terms of the agreement are met as prescribed in writing.

Thanks,

Joe B.
0 votes Thank Flag Link Sat May 22, 2010
David,

My client signed the list that was sent by the sellers, which is was also forwarded to the title company.. I used the TAR-1903/TREC-39-6. However, obviously there is not enough room on the promulgated form to enter all repair items if they are numerous. I thereby created an attachment as instructed by the TAR. I merely retyped the list that was agreed to as an attachment and forwarded that list again with the TAR-1930/TREC-39-6. Besides, there is no law or legal presidence requiring the use of TAR forms. The "Statue of Frauds" requires that real estate transactions be in writing. Which in this case is.

Thanks,

Joe B.
0 votes Thank Flag Link Sat May 22, 2010
Perhaps if you used an amendment TAR-1903/TREC-39-6 instead of a list on a piece of paper, you would have more of a case. At a minimum you could have used an amendment to change item 22 (AGREEMENT OF PARTIES) to include your "list". So the real question is; if your not using the promulgated forms are you now practicing law without a license?

The fact that the sellers sent you a list of what they (at that moment) would complete, and instead of having your clients sign the list they provided, you completed a new shiny list and when the sellers changed their mind, the previous list was not accepted and signed by your client, you could be considered an error on your part for not having your client sign the list they sent you and conveying the acceptance of that list at that time. The sellers changed their mind prior to your clients accepting the changes. The sellers in effect rescinded their offer of repairs prior to your clients’ acceptance. (Nothing wrong with that) In addition what do you have that ties the list to the contract? Is it listed as an addendum? Did you title and number it?

Lesson learned: contracts don't have to be pretty to be enforceable, but they have to be in writing.
Web Reference: http://www.halfpriced.com
0 votes Thank Flag Link Sat May 22, 2010
Sorry, but I did not read that you had already spoken with your Broker. You should advise your buyers to speak with a real estate attorney. They have several courses of action open to them and you through your Broker might have a lawsuit against the seller also. You fulfilled the requirement of bringing a ready, willing and able buyer to them, a contract was signed and you are owed a commission. But again, speak with a real estate attorney.
0 votes Thank Flag Link Sat May 22, 2010
Thanks Ralph, that's the most obvious answer, and always the first resource. I have already addressed this with my broker and I have his repsonse. The broker does not always have all of the answers. This forum provides different perspectives that can be shared with the broker, and considered when determing the course of action.

Thanks,

Joe B.
0 votes Thank Flag Link Sat May 22, 2010
What did your Broker tell you to do? That is the person to tell you how to proceed. The Broker is responsible for your actions or inactions. Have a sitdown with your Broker first.
0 votes Thank Flag Link Sat May 22, 2010
Ramon, thanks for your sound advice. I am dusting off my "Law of Contracts' book as we speak. I do have the list of repairs which has signatures of both parties. I also have also printed all emails related to this transaction for reference and in chronlogical order. I am meetying with an attorney on Monday, who owns the title company. I will post the results promptly.

Thanks again!!! Joe B.
0 votes Thank Flag Link Sat May 22, 2010
Forget about your "retyped" list!!!

You must have your buyers sign on the list originally returned to you, and take your contract to the title company. Initial to the side of any changes.

Once the contract is at title if the seller changes their mind and breach, they could be liable for up to "X” times the earnest money (I think it is three)

You need to understand, sellers can change their mind at any time, and there is no contract in the world that can make them sell anything.

But buyers have rights too! and it is your fiduciary duty to point them in the right direction. Please dust off your Law of Contracts book, your buyers have a right to be indemnified for any suffering and monetary loss, a sellers breach can cause them. Search for a term called "Estoppel".

You should write a letter in coordination with your broker, and explain to the sellers that backing out from the repairs they have already signed to get fixed for the buyer would enter both parties into a legal fight where the buyers can claim "estoppel".

This is how it works in case you end up in a small claims court:
You go to the small claims court and present your case, you are granted a date and they send a letter to the sellers saying that they must be present at said time.

By this time a Real Estate Lawyer should, but not "must" be hired, an estoppel in a small claims court is not that big of a deal and judges see this kind of issues fairly often.

Its very simple, the defense must demonstrate that the plaintiff's own statements or actions (THEY ALREADY SIGN THE REPAIR LIST) go against established facts (NOW THEY WON'T DO THE REPAIRS) in order to claim an estoppel. There must also be evidence that the defendant based his actions strictly on the reliance of truth and that he suffered damages because of it (YOUR CLIENT STOPPED LOOKING AT OTHER OPTIONS, GOD FORBID THEY LOST THE 1ST TIME HOME BUYERS BENEFIT, THEIR EARNEST MONEY HAVE BEEN TIED UP, THEY PROBABLY WILL NEED TO PAY RENT FOR ANOTHER MONTH, YOUR CLIENT COULD HAVE BEEN LOOKING TO RELOCATE DUE TO A JOB IN ANOTHER PART OF TOWN, SO COMMUTING CAN BE A PAIN. ALL BECAUSE THEY RELIED ON THE SELLER PERFORMING THE REPAIRS AS IT SHOWS IN THE EVIDENCE PRESENTED TO THE COURT, AND THEY HAVE REFUSED TO DO THEM.

Enforcement of an estoppel is generally left up to the discretion of the individual judge hearing the case. But the remedies could be many times the earnest money.

Simply put: With this tool you can make them do the repairs as agreed (which is good), or almost surely have a judge return the earnest money MANY TIMES OVER to your buyer.

Both ways your client comes out a winner.

Thank you,

Ramon Viggiani -Realtor-
http://www.BuyingAndSellingUSA.com

P.S: I am not a lawyer, and my views should not replace, nor deviate anyone from seeking the interpretation of a certified Real Estate Attorney.
0 votes Thank Flag Link Sat May 22, 2010
Yionada, thanks for your coment. Obviously there is a lot going on in between , but there is not enough space to provide every detail, so I paraphrased. The bottom line is this: I have a list of repairs that the sellers agreed to, signed by the sellers, provided to me by the agent. The agent did inform me that there is a higher offer from another agent (as is). This is besides the point. How can the seller retract their agreement to make repairs after the option period???
0 votes Thank Flag Link Sat May 22, 2010
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