Abuyer, Home Buyer in Detroit, MI

Cancelling a contract within the inspection period without performing an inspection

Asked by Abuyer, Detroit, MI Sun May 12, 2013

I recently made an offer on a house. Within the 10 day inspection period, I delivered a timely cancellation notice to the seller. A few days ago a received a letter from the sellers attorney statting that the cancellation notice was ineffective since no inspection was performed. The contract is a typical FAR?BAR as-is residential contract which states "If buyer chooses to have such inspection performed, in BUYERS SOLE DESCRETION...". Am I at fault? The good thing is that I do not have any deposit down. Do I need to seek professional help or am I good?

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16
I agree with Ann. Time to lawyer up.
1 vote Thank Flag Link Sun May 12, 2013
Thats a great point you bring out Ann and Maria. We sent the cancellation notice within 3 days of the effective date. The cancellation notice does have any place where one needs to mention the reason behind the cancellation. Since it is well within the inspection period the buyer is presuming that the cancellation is based on the inspection period clause. We have not mentioned that is the reason. I guess at this point I could still use the condo contingency for pet restriction to my defence as a back up in case the inspection clause fails(Still don't know why it should fail). I have decided to not respond to the letters anymore, unless and until they file a lawsuit. I dont believe this is going anywhere for them and their intentions of making some easy money using baseless allegations is going to be futile. I just consulted an attorney who recommended there is no reason for me to act at this time.
0 votes Thank Flag Link Mon May 13, 2013
I have to concur with Ann. A condo rider attached to the contract should give you a way out. Better yet, seek a legal advice. Parting with a dog--a family member-- is definitely not a resolution to this problem.

I have three dogs myself and at this point in my life, they are my priorities.
0 votes Thank Flag Link Mon May 13, 2013
There should have been a contingency for condo documents in your contract. Why didn't you exercise that?
0 votes Thank Flag Link Mon May 13, 2013
Thats a great point you bring out. We sent the cancellation notice within 3 days of the effective date. The cancellation notice does have any place where one needs to mention the reason behind the cancellation. Since it is well within the inspection period the buyer is presuming that the cancellation is based on the inspection period clause. We have not mentioned that is the reason. I guess at this point I could still use the condo contingency for pet restriction to my defence as a back up in case the inspection clause fails. I have decided to not respond to the letters anymore, unless and until they file a lawsuit. I dont believe this is going anywhere for them and their intentions of making some easy money using baseless allegations is going to be futile. I just consulted an attorney who recommended there is no reason for me to act now.
Flag Mon May 13, 2013
Honestly, it is my dog. I have an 80 lbs golden retreiver. The condo assn rules (the seller never supplied us with a copy) states that dogs larger than 30lbs are not permitted. I did not think the property was worth enough to part away from my dog.
0 votes Thank Flag Link Mon May 13, 2013
Hello;

Only an attorney can help you now.
Good luck.
0 votes Thank Flag Link Mon May 13, 2013
While it is not uncommon to use the inspection clause as an escape hatch, it would seem wise to at least have an inspection done. Too many people "lock up" a listing so that they can ponder their options, but doing so comes with some risk. I think it's unlikely that the seller will prevail in this case, but the mere fact that they have essentially forced you to get an attorney and defend yourself is a sort of victory in itself. Hopefully others will learn from your mistake...
0 votes Thank Flag Link Mon May 13, 2013
The best advice I can five is that it should be a basic premise that attorneys deal with attorneys. And since you have been sent a letter by the seller's attorney, it would be wise to seek similar advice.

You are correct in that unless financing, having an inspection is a choice made by the buyer. The 10 day inspection is intended to give the buyer the option to back out of the agreement if excessive problems are identified as a result of the professionally conducted inspection. Since you have not had an inspection, there wouldn't seem to be any factual basis on which to base you withdrawal from the contract based on a "right of cancellation" within the 10 day window.

Good luck,

Bill
0 votes Thank Flag Link Mon May 13, 2013
I am not a lawyer and my opinion should not be construed as legal advice.
The home inspection contingency gives you the right to terminate the contract if the condition of the property does not suit your standards. You can terminate the contract within the home inspection contingency period and your Earnest Money Deposit should be returned. Then all parties should be relieved of any further obligations set forth on the contract.


Clearly, it is a home inspection contingency. Now, what is the reason why you are cancelling the contract? Cold feet?

You have to seek a lawyer to assist you in this matter.

Best of luck.
0 votes Thank Flag Link Mon May 13, 2013
The Far Bar says nothing regarding that the inspection must be performed by a professional inspector. Did you or a friend went back to the home a second time and saw or found out something that made you change your mind about the property? Sound like contacting an attorney would be a positive next step.

Perhaps it would had been wiser (and cheaper than an attorney) to pay an inspector to go in, just so you had that documented...but clearly to late now. Lesson learned.

Would love to know the outcome when everything is settled. Please keep the posting open and let us all know.

Tony Vega
0 votes Thank Flag Link Sun May 12, 2013
You further wrote that the letter was addressed to your agent. Since that is the case I suggest you first speak to the agent's broker. Perhaps the broker of record can first offer you assistance in this matter and maybe even resolve the issue by following the FREC dispute guidelines. Please note I said "perhaps."
0 votes Thank Flag Link Sun May 12, 2013
Read your purchase agreement and any addendums that may be a part of the purchase agreement, what is Seller's legal recourse if you refuse to purchase? Most States only allow Sellers' to retain buyer's Earnest money if buyer fails to perform on a purchase agreement, if seller did not require earnest money and accepted your offer without earnest money, this was the sellers' mistake this is the reason earnest money is recommened. I am not an attorney, this is solely my opinion. However yes you are at fault if you entered into a binding contract and did not fulfill your obligations.
0 votes Thank Flag Link Sun May 12, 2013
Not really. You are a party to the contract & it would be in your best interest to retain representation.
0 votes Thank Flag Link Sun May 12, 2013
The notice that the sellers attorney sent was addressed to my agent, not to me. Does that change anything as far as my obligation to respond is concerned?
0 votes Thank Flag Link Sun May 12, 2013
In my humble layperson's opinion you are not at fault but I am not an attorney. Now that the seller has retained an attorney it's in your best interest to speak to a real estate attorney for true legal advice.
It probably would have been less expensive to have just gone through with an inspection and then backed away.
0 votes Thank Flag Link Sun May 12, 2013
Abuyer, there's now a legal dispute... the seller has a lawyer.... so should you. This is a legal matter, and only an attorney can help you now.
0 votes Thank Flag Link Sun May 12, 2013
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