Do we have to pay HOA and Escrow cancellation fees? The seller refuse to sign addendum & revised Residential Purchase Agreement and cancel the PA

Asked by dk_nguyen_1, Iselin, NJ Wed May 29, 2013

We entered in a standard PA for a rental property on 4/9/13. We use the sellers’ agent because we were advised that we will have a better chance at getting the place.
At the time we entered the PA, we were informed that the sellers’ lease agreement with tenants expires on 6/14/13; Sellers then proposed an addendum stating the following and we conditionally agreed to it.
1. Sellers to be responsible for collecting rents from tenant until property is vacated.
2. Sellers to bear all costs of vacating property at the end of tenants lease.
3. Sellers to have home professionally cleaned after tenant vacates property.
4. Sellers to ensure rent of $XXXX per month until home is vacated.
The condition we put forth to the sellers at the time we signed the above addendum #1 was to have tenants security deposit transfer to escrow to cover any damages which may cause by tenants between escrow closed and the time they move out.
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6
Ingrid Ski R…, Agent, Mission Viejo, CA
Thu May 30, 2013
Hi Nguyen

You should be talking with a real Estste attorney for any legal advise for this transaction. Did your agent give a notice for the sellers to perform for the addendum? Did you want to go that route? In most cases I have worked with those fees would come out of your deposit if you get your deposit back
You could get those fees back if there is another buyer in place and sign an addendum that X amount is for HOA fees and to be taken out of the new buyers deposit. I have done this
Why would they want to cancel when the lender was at fault and not you Just 2-3 days doe closing.? What is going on in this transaction comes to mind and each transaction has its own idiosyncrasies
A per diem could have been suggested for the delay in days and paid to the seller.
Talk to an attorney to see how they can help you in your situation would be the best advise I can give

Ingrid Ski Realtor
949-874-0432
OCAreaHomes@gmail.com
0 votes
Steven Abrah…, Agent, LAGUNA BEACH, CA
Wed May 29, 2013
I would speak to a Real Estate Attorney. Is this home located in CA? There are a number of issues with what you are describing. Did you remove all contingencies? Did your agent represent you properly? Unless altered in the RPA, you have 5 days to review all disclosures, once received. If documents were not received timely, this too would extend your contingency period. Do you want the home? If you do, I would not agree to the cancelation of escrow at this point. Again, get the advice from a real estate attorney. As far as the fees go, you will typically be responsible for the fees, but there are exceptions. Good Luck!
0 votes
, ,
Wed May 29, 2013
You will need to pay the fees already incurred by escrow. Your agent will help you through the process of unwinding the transaction. You will get your deposit back minus the fees already incurred by escrow on your behalf. Bummer...I hope you are working with an agent...it's reasons like this that make it important to do so.
0 votes
Laura, thank you for your input. Do you know if we also have to pay for HOA transfer fees?
Flag Wed May 29, 2013
OCRealtor, , Aliso Viejo, CA
Wed May 29, 2013
You need to contact a real estate attorney--you may have agreed in your docments to pay certain fees in the event of cancellation. Did you remove all contingencies before you were issued the Notice to Perform? Typically if you have removed all contingencies in writing and you are due to close escrow but haven't, then the appropriate form that would be issued to you is callled a Demand to Close Escrow. It gives you 3 days to close escrow, and not the 2 days to perform that you were given. That's something you may want to look into....
0 votes
Ron Thomas, Agent, Fresno, CA
Wed May 29, 2013
This is a new one:
Another reason, (number 37 or 38, i believe), to have your own Buyer's Agent:
Do you still believe that you are getting a better deal, or that you are better off?

If you look at your Escrow papers; you probably agreed to this; and Attorney fees will probably exceed these fees.
But you are on your own; in more ways than one.
0 votes
thank you, Ron.

yes, looking back, you're absolutely right. we learned our lesson
Flag Wed May 29, 2013
dk_nguyen_1, Home Buyer, Iselin, NJ
Wed May 29, 2013
(continued)

By 5/9/13, we didn’t receive any addendum to address tenant security deposit so we push on for this addendum. On 5/10, we received an addendum #4 from the real estate agent. Addendum #4 stated the following.

1. Purchase agreement addendum to be incorporated into the Residential Purchase Agreement. As stated in item 3 of Purchase Agreement Addendum, buyer will assume lease and seller will transfer deposit paid by tenant and last month’s rent pro-rated as of the close of escrow date.
2. Addendum #1 to be null and void.

Upon receiving addendum #4, we requested lease agreement between sellers and tenants plus MIMO list. Couple of days later, we received the rental lease agreement but without MIMO list. We made numerous requests for MIMO list and finally received on 5/17/13. On 5/20 @ 10:00 PM, we received a ‘notice to performed’ from the sellers to have escrow close within 48 hours.
On 5/21, lender informed us that loan doc will be available 5/22 AM. However, due to typo error, loan doc got held back one day.

In the late evening of 5/22, the sellers still refuse to sign addendum #4 or the Residential Purchase Agreement but insist we must have escrow close by 5/22. Due to addendum #4 and Residential Purchase Agreement not signed by sellers and loan doc got held up until 5/23, we were not able to close Escrow on 5/22.

On 5/23, with loan doc now available, we agree to take the risk at not having addendum #4 signed by seller and agree to sign loan and escrow without addendum #4 and Residential purchase agreement, but the sellers cancelled the Escrow @ 10 PM on 5/22.

Escrow then goes after us for Home Owner Association and Escrow cancellation fees.
0 votes
Did you get a "Notice to Perform" or a "Demand to Close Escrow" or BOTH ? Get yourself an attorney ASAP.
Flag Wed May 29, 2013
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